Housing subsidies and work incentives in Great Britain

The relationship between housing costs, wages and transfer programmes is co mplex yet helps determine the incentive to work for individuals in low inco me or high housing cost households. We estimate a static discrete choice la bour supply model that allows for housing benefit programme participation, using samples of married women and unmarried women drawn from Great Britain Family Resources Surveys 1994/5-97/8. We find women are guile responsive t o labour supply incentives and that housing benefit income has similar ince ntive effects to earned income which suggests any 'stigma' is small. Our an alysis is complemented by simulating housing benefit and direct rent subsid y reforms.