Bingley, Paul and Walker, Ian, 1954- (2000) Housing subsidies and work incentives in Great Britain. Working Paper. Coventry: University of Warwick, Department of Economics. (Warwick economic research papers).

Preview

PDF WRAP_Bingley_twerp559.pdf - Requires a PDF viewer such as GSview, Xpdf or Adobe Acrobat Reader Download (114Kb)

Abstract

In Great Britain the move away from rented accommodation to owner occupation is leaving behind a large group of households with low incomes, wages and hours of work, and high housing costs, who are increasingly in receipt of welfare transfers. The disparity along all of these dimensions between renters and owner occupiers has continued to grow since the 1970’s. The relationship between housing costs, wages and transfer programmes is complex and yet plays an important part in determining the incentive to work for individuals in low income or high housing cost households. While it is true that many individuals who are in these categories are out of the labour force (retired, sick and disabled), there are many who are not and whose incentive to seek work, or to work harder if already in work, could be modified by directly changing the rent levels they face or indirectly via changes to the structure of programmes designed to subsidise housing for the poor. Here we estimate a static discrete choice labour supply model which allows for housing benefit programme participation. We use samples of 42491 married women and 13340 unmarried women drawn from Great Britain Family Resources Surveys 1994/5-97/8. We find that women are quite responsive to labour supply incentives, housing benefit income has similar incentive effects to earned income which suggests any "stigma" is small. Our analysis is complemented by simulating housing benefit and direct rent subsidy reforms.

Item Type:	Working or Discussion Paper (Working Paper)
Subjects:	H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HV Social pathology. Social and public welfare
Divisions:	Faculty of Social Sciences > Economics
Library of Congress Subject Headings (LCSH):	Housing subsidies -- Great Britain, Welfare economics, Labor supply -- Great Britain, Employee motivation -- Great Britain
Series Name:	Warwick economic research papers
Publisher:	University of Warwick, Department of Economics
Place of Publication:	Coventry
Date:	13 April 2000
Number:	No.559
Number of Pages:	18
Status:	Not Peer Reviewed
Access rights to Published version:	Open Access
Description:	Version 2.001
Funder:	Economic and Social Research Council (Great Britain) (ESRC), Leverhulme Trust (LT), Great Britain. Dept. of the Environment, Transport and the Regions (DETR), University of Keele
Grant number:	R000233462 (ESRC), grant F/368/F (LT),
References:	Bell, Brian, Richard Blundell and John Van Reenen (1999) Options for Evaluating the New Deal, IFS Working Paper. Blundell, Richard, Alan Duncan and Costas Meghir (1998), The Labour Supply of UK Lone Mothers, Econometrica. Blundell, Richard and Thomas MaCurdy (1999) Labour Supplay: A Review of Alternative Approaches, in Orley Ashenfelter and David Card (eds.) Handbook of Labor Economics, Amsterdam: North H Blundell, Richard, Vanessa Fry and Ian Walker (1988), Modelling the Take-Up of Means Tested Benefits: the Case of Housing Benefit in the UK, Economic Journal, 98, 58-74. Butler, J.S. and Robert Moffitt (1982), A Computationally Efficient Quadrature Procedure for the One-Factor Multinomial Probit Model, Econometrica, 50,3, 761-764. Department of Social Security (1997), Piloting Change in Social Security: Helping People into Work, HMSO, London. Duncan,Alan (1999) Labour Supplyand the Working Families Tax Credit, Nottingham University Economics Department Working Paper. Eissa and Leibman (1996) Labours Supply and the 1986 US Tax Reform, Quarterly Journal of Economics. Fischer, Gregory, and Daniel Nagin (1981), Random versus Fixed Coefficient Quantal Choice Models, in Charles Manski and Daniel McFadden (eds.) Structural Analysis of Discrete Data, Cambridge, MA: MIT Press, 273-304. Ford, J., Kempson, E., and White, W.(1996), Rents and WorkIncentives, London: Policy Studies Institute. Giles, Chris, Paul Johnson and Julian McCrae (1997), Housing Benefit and the Financial Returns to Employment for Tenants in the Social Sector, Fiscal Studies, 18, 49-72. Giles, Chris and Alan Duncan (1996), Labour Supply and Family Credit, Economic Journal. Hausman, Jerry and David Wise (1978), A Conditional Probit Model for Qualitative Choice: Discrete Decisions Recognizing Interdependence and Heterogeneous Preferences, Econometrica, 46, 403-426. Heckman, James and Burton Singer (1984), A Method for Minimizing the Impact of Distributional Assumptions in Econometric Models for Duration Data, Econometrica, 52:2, 271-320. Hoynes, Hilary (1996a), Welfare Transfers in Two-Parent Families: The Case of AFDC-UP, Econometrica, 64:2, 295-332. Keane, Michael and Robert Moffitt (1998), A Structural Model of Multiple Welfare Program Participation and Labor Supply, International Economic Review. MaCurdy, Thomas, David Green and Harry Paarsch (1990), Assessing Empirical Approaches for Analysing Taxes and Labour Supply, Journal of Human Resources, 25, 415-490. McFadden, Daniel (1984), Econometric Analysis of Qualitative Response Models, in Zvi Griliches and Michael D. Intriligator (eds.), Handbook of Econometrics Vol II, New York: Elsevier, 1396-1457. McFadden, Daniel and Train (1998), Mixed Logit Models for Multinomial Choices, Berkley Economics Working Paper. Moffitt, Robert (1983), An Economic Model of Welfare Stigma, American Economic Review, 73:5, 1023-1035. Moffitt, Robert (1984), The Estimation of a Joint Wage-Hours Labour Supply Model, Journal of Labor Economics, 2, 550-566. Moffitt, Robert (1992), Labour Supply and Work Incentives: A Survey, Journal of Economics Literature. Van Soest, Arthur (1995) Structural Models of Family Labor Supply: A Discrete Choice Approach, Journal of Human Resources, 30:1, 63-88. Wilson and Morgan (1998) Rent Levels, Affordability and Housing Benefit, House of Commons Library Research Paper, 98:69. Zabalza, Antonio, Christopher Pissarides and Margaret Barton (1980) Social Security and the Choice Between Full-Time Work, Part-Time Work and Retirement, Journal of Public Economics, 14, 245-276.
URI:	http://wrap.warwick.ac.uk/id/eprint/1618

Request changes to a record

Actions (login required)

View Item