Subsidized housing and work among welfare recipients

Abstract

Some studies suggest an inverse relationship between housing assistance and employment. That is, when housing assistance increases, employment decreases. A popular view holds that subsidized housing generates an economic disincentive to work. This article examines the relationship between subsidized housing and the number of hours female recipients of public assistance work. A California survey reveals that residents in Section 8 housing work considerably more than do those renting in the private market or residing in public housing. This finding holds after controlling for observable personal characteristics and accounting for income effects. Additional analysis comparing the two housing programs shows a consistent, robust difference, with those in Section 8 working more.

One explanation is that the finding is a statistical artifact caused by programmatic creaming or self‐selection among applicants. The second, more plausible explanation is that Section 8 housing offers residential choice and mobility that improve opportunities for employment.