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

Susin, Scott (2005) “Longitudinal Outcomes of Subsidized Housing Recipients in Matched Survey and Administrative Data.” Cityscape. 8(2): 189-218. U.S. Department of Housing and Urban Development (2004) The Flexible Voucher Program: Why a New Approach to Housing Subsidy is Needed. Washington, DC: HUD. http://www.hud.gov/offices/pih/programs/hcv/fvp/wponfvp.pdf Yelowitz, Aaron S. (2001) “Public Housing and Labor Supply.” Working Paper, Department of Economics, University of Kentucky.

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

Published on Mar 18, 2010

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This study estimates the effects of means-tested housing programs on labor supply using data from a randomized housing voucher wait-list lottery in Chicago. Evidence for the net effects of housing programs on labor supply is central to a wide range of policy decisions about how to provide housing assistance to the poor. Economic theory is ambiguous about the expected sign of any labor supply response. We find that among working-age, able-bodied adults, housing voucher use reduces quarterly labor force participation rates by 4 percentage points (6 percent of the control complier mean) and quarterly earnings by $285 (10 percent), and increases social program participation rates by 2 percentage points (16 percent of the control mean). These impacts are toward the lower end of the range of recent estimates from other studies of housing programs, but nonetheless do still imply that housing vouchers reduce labor supply.

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