This paper provides new evidence on the incidence of rent subsidies. We use administrative panel data on subsidy recipients in the UK and exploit a natural experiment in which entitlements were cut for about a million households. In the short-run, about 90% of the incidence of the cuts is found to be on tenants. We also uncover an important dimension of heterogeneity in the balance of incidence between tenants and their landlords. We find that the share of the incidence of the cut that falls on landlords, rather than tenants, is higher in cases where the previous system looked more generous relative to tenants’ likely housing needs. This is informative about the likely incidence of alternative rent subsidy schemes.
Authors
Deputy Director
Carl, a Deputy Director, is an editor of the IFS Green Budget, is expert on the UK pension system and sits on the Social Security Advisory Committee.
Mike Brewer
James Browne
Deputy Director
Robert is a Deputy Director. His work focuses on primarily on the labour market, income and wealth inequality, and the design of the welfare system.
Andrew Hood
Journal article details
- DOI
- 10.1016/j.jue.2019.103198
- Publisher
- Elsevier
- JEL
- H22, H53, I38
- Issue
- October 2019
Suggested citation
Brewer, M et al. (2019). 'The curious incidence of rent subsidies: evidence of heterogeneity from administrative data' (2019)
More from IFS
Understand this issue
It's time to stamp on a tax that penalises landlords and renters
22 January 2024
A mess has been made of Child Benefit, and the clear-up operation may not be easy
29 March 2024
How important is the Bank of Mum and Dad?
15 December 2023
Policy analysis
Recent trends in and the outlook for health-related benefits
19 April 2024
4.2 million working-age people now claiming health-related benefits, could rise by 30% by the end of the decade
19 April 2024
The IFS Scottish Budget Report – 2024–25
22 February 2024
Academic research
Police infrastructure, police performance, and crime: Evidence from austerity cuts
24 April 2024
House price rises and borrowing to invest
27 March 2024
The menopause "penalty"
18 March 2024