Who really benefits from housing assistance? Evidence on severe housing deprivation in OECD countries

This study examines the effect of public social housing expenditures (SEH) on severe housing deprivation in 27 OECD countries from 2010 to 2020 using System GMM. We test whether increased public spending on housing improves living conditions, especially for vulnerable groups. The analysis covers the full sample and subgroups by income, household type, tenure, and urbanization. Results show that a 1 percentage point rise in SEH (as a share of GDP) reduces severe housing deprivation by 0.63–0.68 percentage points in the short term ( P < 0.05). Long-run effects are stronger: a sustained 1 percentage point increase lowers deprivation by about 2.3 points. Subgroup outcomes are uneven. Middle- and upper-income households gain significantly, while the lowest income quintile and those below the poverty line see smaller or insignificant improvements. Renters—particularly market tenants—benefit in the short term, but these gains often fade, possibly due to dynamic model constraints. Spatially, rural areas and towns improve more than large cities. Overall, findings highlight the redistributive potential of housing-related social expenditures and their relevance to debates on affordability, inequality, and urban planning.