Christian Dustmann, Bernd Fitzenberger, Markus Zimmermann, 22 October 2018

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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