Housing expenditures and income inequality: Shifts in housing costs exacerbated the rise in income inequality

a column by Christian Dustmann, Bernd Fitzenberger and Markus Zimmermann for VOX: CEPR’s Policy Portal

There is a lot of concern about the rise in housing costs in many developed countries and the impact it has on living conditions and inequality. Yet, to date little evidence exists on how changes in housing costs affect the distribution of disposable income.

This column draws on recent research for Germany to show that shifts in housing costs severely exacerbated the rise in income inequality net of housing expenditures, and discusses the reasons behind this and implications for inequality.

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