Does Housing Allowances affect Recipient’s Tenure choice in Sweden? - Evidence from a panel data study
نویسندگان
چکیده
Recent years have witnessed the increasing popularity of housing allowance as a major housing policy in countries across the world. However, the research on behavior impacts of housing benefits is still in paucity. In this paper, we present a tentative attempt to investigate an issue that not explored before: does higher level of welfare reliance on housing allowance promote or depress recipient household's homeownership propensity. To reliably identify the causality and impact estimates in our study, we establish a two-stage conditional maximum likelihood probit (2SCMLP) model with panel data setting to simultaneously control for the individual heterogeneity, state dependence and endogeneity. The empirical study is based on longitudinal data of housing allowance recipients in three major metropolitan areas of Sweden between the year 1994 and 2002. Empirical results indicate that, recipient households with higher housing-expenditure subsidy ratio are encouraged to have more homeownership propensity. Stimulation analysis suggests that, a more generous housing allowance policy is a cost-efficient instrument to increase homeownership rate among low-income population. In summary, we dismiss the worry of " rental trap " within Swedish housing allowance system and we argue that the Swedish housing allowance system is doing a good job in supporting recipient households to obtain and maintain their homeownership. Furthermore, we believe the policy reform of Swedish ho using allowance system in 1997 did not change this effect.
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