Drivers of Rising Housing Allowance Claimant Numbers: Evidence from the Irish Private Rented Sector

Abstract

Recent years have seen growing concern among policy makers about difficulties in controlling the numbers of claimants and cost of housing allowances, which are now the main state housing support for low-income households in most Western European countries. This issue has raised particular concerns in the Republic of Ireland where the numbers of claimants of rent supplement, the principal state housing support for unemployed private renting households, have climbed steadily since the 1980s despite a marked concurrent reduction in unemployment rates. This paper attempts to explain this conundrum using administrative data on all claimants in 2005 and 2004. It reveals that although the traditional drivers of demand for this benefit—rising unemployment and lone-parent families—have become less significant in recent years, they have been replaced by a new driver, rising immigration. In addition, labour market activation measures have proved counterproductive. They have incentivised part-time, rather than full-time, work and consequent continued dependence on rent supplement.