Distributive and poverty-reducing effects of in-kind housing benefits in Europe: with a case study for Germany

Abstract

While cash housing benefits are generally included in household disposable income, the effect of social housing is not accounted for. This may provide a misleading picture of the impact of overall housing policies on inequality and poverty, as countries use different policies to help households meet their housing expenses. In this article, we present the first comprehensive study of the impact of in-kind housing benefits on income distribution and poverty in Europe. We contribute to two strands of the literature, notably the one that aims to quantify income advantages derived from housing and the other that aims to incorporate the value of public services in income. For this purpose, we calculate estimates of imputed rent and analyse how these benefits are distributed over the population and how they help to combat poverty. Our estimates are also relevant for the ongoing debate on whether cash or in-kind social transfers are to be preferred in social policy. We illustrate this with a case study for Germany, where we compare the distributive and poverty effect of cash and in-kind social benefits for housing for a longer time period.