Source · aikyam school

The Effects of Housing Assistance on Labor Supply: Evidence from a Voucher Lottery

Original source

Brian A. Jacob; Jens Ludwig

The Effects of Housing Assistance on Labor Supply: Evidence from a Voucher Lottery (2012)

Published research article · American Economic Review, 102(1), 272–304

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Calibrated Labor Supply Elasticity of Housing Subsidies

"Our simple calibration exercise suggests an income elasticity of -0.09 and a compensated wage elasticity of 0.15."

Housing Assistance Leaky Bucket Efficiency Loss

"But vouchers also have the unintended consequence of reducing annual earnings by around $1,316 among program participants, around 19 percent of the value of the subsidy to voucher recipients."

Means-Tested Housing Voucher Work Disincentive

"We find that among working-age, able-bodied adults, housing voucher use reduces labor force participation by around 4 percentage points (6 percent) and quarterly earnings by $329 (10 percent), and increases Temporary Assistance for Needy Families program participation by around 2 percentage points (15 percent)."

In-Kind Housing Benefit Budget Constraint Kink

"Figure 1 from Currie and Gahvari (2008) shows that if a government program that provides people with an in-kind benefit leads the good to be overprovided, households are at the kink in their budget constraint created by the in-kind benefit..."

Lifecycle Labor Supply Anticipation Effect

"We also see a slight increase in average labor supply for those families who expect to receive a voucher in the future, consistent with predictions from the lifecycle labor supply model that people may shift work effort towards periods when their net wage is relatively higher."

Macroeconomic Mitigation of Work Disincentives

"In contrast, it appears that weak economic conditions at the time of voucher offer might mitigate the work disincentive effects associated with a voucher offer."

Neighborhood Quality Neutrality of Unrestricted Vouchers

"We find no evidence that the housing-specific mechanisms hypothesized to promote work, such as neighborhood quality or residential stability, are important empirically."

TANF Program Rule Interaction Muting

"Voucher use reduces employment by 6 percentage points (9 percent) among those who were not receiving benefits at baseline, and by only 2.5 percentage points (4 percent) among those receiving benefits."

Wait-List Deferred Residential Mobility

"Figure 3... makes clear that voucher offers change the timing of moves: treatment families who expect to receive a voucher are less likely to move than controls until they are offered a voucher and then become more likely to move."