If public transfers such as housing benefits lead to a decrease in private transfers, the redistribution effect of public transfers is weakened. Therefore, the redistribution effect is one of the most important research topics in public finance, and m...
If public transfers such as housing benefits lead to a decrease in private transfers, the redistribution effect of public transfers is weakened. Therefore, the redistribution effect is one of the most important research topics in public finance, and many researchers analyzed the redistribution effect. In this study, the effect of the abolition of the Family Support Obligation Rule in housing benefits implemented in October 2018 on the private transfers of households newly receiving housing benefits was estimated using the differences-in-differences (DID) method to analyze the crowd-out effect. As a result, it was found that the abolition of the Family Support Obligation Rule would crowd out about 43.2% of private transfers. In other words, it was analyzed that private transfers decreased significantly as the eligibility criteria for housing benefits was eased with the repeal of the Family Support Obligation Rule. On the other hand, it was estimated that the abolition of the Family Support Obligation Rule had no significant effect on expenditures, suggesting that the redistribution effect of the abolition of the Family Support Obligation Rule was weakened due to the crowd-out effect. There are positive aspects that the abolition of the Family Support Obligation Rule will resolve the welfare blind spot. In addition, the relief of the burden of support obligations can also be seen as a positive effect of the abolition of the Family Support Obligation Rule. However, since there are concerns about moral hazard, such as household separation or asset transfer to another household, it seems necessary to make policy decisions that take into account the crowd-out effect.