The effects of public low income housing vouchers on social and labor market outcomes
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The Effects of Public Low-Income Housing Vouchers on Social and Labor Market Outcomes . Deven Carlson Robert Haveman Tom Kaplan Barbara Wolfe Institute for Research on Poverty University of Wisconsin-Madison November 21, 2008. Presentation Overview. Prior Research Results

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The Effects of Public Low-Income Housing Vouchers on Social and Labor Market Outcomes

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The effects of public low income housing vouchers on social and labor market outcomes

The Effects of Public Low-Income Housing Vouchers on Social and Labor Market Outcomes

Deven Carlson

Robert Haveman

Tom Kaplan

Barbara Wolfe

Institute for Research on Poverty

University of Wisconsin-Madison

November 21, 2008


Presentation overview

Presentation Overview

  • Prior Research Results

  • Research question and motivation

    • What effect does the receipt of a low-income housing voucher have on social and labor market outcomes?

    • Theoretical link between voucher receipt and outcomes

  • Data sources and methodology

  • Major conclusions

    • Positive effect on neighborhood quality in the long term

    • Short-term changes in household composition, but greater subsequent stability

    • Greater use of TANF and state-subsidized child care

    • Short-term negative effect on earnings diminishes over time

    • Mixed effects on work effort

    • Results vary by demographic subgroup


Previous studies

Previous Studies

  • Experimental

    • Mixed Results

    • Gautreaux Program- Chicago

    • Moving to Opportunity- 5 Cities

    • Welfare to Work- 6 Cities

    • Chicago Housing Authority Natural Experiment

    • Minnesota Family Investment Plan

  • Nonexperimental

    • Also mixed results

    • Bania, Coulton, and Leete (2003)

    • Harkness and Newman (2003; 2006)


Our research approach

Our Research Approach

  • Effect of a housing voucher on social and labor market outcomes for low-income families in Wisconsin

    • Includes both urban and rural areas

    • Large sample sizes allow us to examine several demographic subgroups

    • Pool multiple years and follow recipients over a longer time period


What is the section 8 program how does it work

What is the Section 8 Program? How does it work?

  • Primary objective of program is to enable “very low-income families to choose and lease safe, decent, and affordable privately-owned rental housing.”

    • Section 8 vouchers currently serve about 1.9 million families nationally (more than 850,000 families with minor children).

  • Recipients must have income below 50 percent of area median income.

  • If awarded a voucher, recipients choose available private rental housing and, if they find it, contribute 30 percent of their income toward rent.

  • The program then pays the difference between the contribution and actual rent (up to a locally defined “fair market rent”).


Outcomes of interest

Outcomes of Interest

  • Social Outcomes

    • Neighborhood quality

      • Four measures

    • Household composition changes

      • Six measures of household composition changes

    • Public program participation

      • State-subsidized child care- Wisconsin Shares

      • TANF-Wisconsin Works

  • Labor Market Outcomes

    • Earnings

    • Employment


Theoretical link between voucher receipt and outcomes

Theoretical link between voucher receipt and outcomes

  • Vouchers stimulate mobility

    • Opportunity for re-evaluation

    • Disruption

  • Economic theory

    • Income and substitution effects


Theoretical link between voucher receipt and outcomes1

Theoretical link between voucher receipt and outcomes

  • Social Outcomes

    • Move to a better neighborhood

    • Change structure of household

    • Ambiguous effect on public program participation

  • Labor Market Outcomes

    • Short-term disruption in employment

    • Long-term moves to areas with better employment opportunities


Data and estimation sample

Data and Estimation Sample

  • Data

    • Wisconsin administrative data supplemented with U.S. Census data

  • Sample

    • All cases applying for or receiving Food Stamps between 2000 and 2003

    • Identified two groups: voucher recipients and nonrecipients

      • Calendar year cohorts

      • Pooled sample


Estimation method

Estimation Method

  • Propensity score matching

    • Estimate probability of rental subsidy receipt

      • Rich set of covariates

    • Match voucher recipients to members in the control group

      • Nearest neighbor matching method

    • Matching procedure succeeds in eliminating bias on all observed covariates

    • Labor market, Neighborhood, and Household Composition-Mean comparison

    • Public Program Participation- Regression framework


Results

Results

Social Outcome Results


Neighborhood characteristic results

Neighborhood Characteristic Results

Where applicable, t-stat in parentheses below point estimate


Case composition results

Case Composition Results

Where applicable, t-stat in parentheses below point estimate


Child care results eligible cases

Child Care Results- Eligible Cases

Estimates in bold indicate significance at p<.05 level


Tanf wisconsin works results full sample

TANF/Wisconsin Works Results- Full Sample

Estimates in bold indicate significance at p<.05 level


Results1

Results

Labor Market Outcome Results


Work effort and earnings results full sample

Work Effort and Earnings Results- Full Sample

Where applicable, t-stat in parentheses below point estimate


The annual earnings pattern pooled cohorts

The Annual Earnings Pattern— Pooled Cohorts


Results2

Results

Subgroup Results


Subgroup results

Subgroup Results

  • Patterns we see in full sample are generally present in subgroups as well

  • Case composition

    • Adult loss in base year especially prevalent among young, female, rural, single parents

  • Child care participation

    • Effect of voucher greatest among females, Hispanics, and Milwaukee residents

  • TANF participation

    • Effect of voucher greatest among females, young, urban areas, and families with children


Earnings results selected subgroups

Earnings Results- Selected Subgroups

Where applicable, t-stat in parentheses below point estimate


Earnings results selected subgroups1

Earnings Results- Selected Subgroups

Where applicable, t-stat in parentheses below point estimate


Conclusions

Conclusions

  • Vouchers provide opportunity for re-evaluation

    • Living situation

    • Employment

    • Public benefits

  • Also can cause short-term disruptions

  • Effects appear to vary by demographic subgroup

  • Future Work

    • Additional programs

    • Additional estimation strategies


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