Scandinavian Working Papers in Economics

Working Paper Series,
Uppsala University, Department of Economics

No 2006:1: The Dynamics of Housing Allowance Claims in Sweden: A discrete-time hazard analysis

Jie Chen ()
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Jie Chen: Department of Economics, Postal: Uppsala University, P.O. Box 513, SE-751 20 Uppsala, Sweden

Abstract: This paper analyses the dynamics of the duration of housing allowance claims in Sweden during the period 1991 to 2002. The central concern in this paper is whether the Swedish housing allowance system creates dependence on welfare. Using longitudinal data from Swedish micro database-LINDA, this paper found that there is no evidence of negative duration dependence arising from the duration of housing allowance claims. This finding is consistent across different model specifications and various controls of the heterogeneity issue. Hence we come to the conclusion that a recipient’s exit rate from the system does not decrease over the duration claim. This paper also shows that the demographic characteristics, educational background, labour market status and economic contextual conditions play important roles in determining recipients’ conditional probability of exiting from the housing allowance system. However, there are substantial variations in the factors’ impact across different household types.

Keywords: housing allowance; discrete-time hazard; duration dependence

JEL-codes: H24; I38; R21

37 pages, January 4, 2006

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