The Long-Term Effects of Housing Assistance on Self-Sufficiency Detailed

With the variety of Federal programs available to assist low-income families with children and Americans' increasing expectation that these programs accomplish more to meet the immediate needs of families, the Administration wants to ensure that these programs do not perpetuate poverty by encouraging permanent dependence on public support. A new report issued by HUD, The Long Term Effects of Housing Assistance on Self-Sufficiency, Final Report, addresses the intensified debate about the fundamental purpose of housing assistance for the poor. The core question is whether the traditional goal of decent, affordable housing should continue to be viewed as an end in itself or as a means to economic independence.

Few studies have examined the effects of housing assistance on self-sufficiency, and none has addressed the long-term impacts. Long Term Effects addresses these gaps by examining the effects of housing assistance received by children between the ages of 10 and 16 at some point during the period 1968-82 on four outcomes experienced in adulthood. These outcomes are welfare receipt between ages 20 and 27, earnings above poverty between ages 25 and 27, total earnings between ages 25 and 27, and educational attainment at age 27.

The report analyzes the impact of two types of housing assistance: public housing and privately owned assisted housing that was built or rehabilitated using Federal Government subsidies. These two programs comprise about 56 percent of the total assisted-housing stock.

The study relies on a unique database, the Panel Study of Income Dynamics (PSID)-Assisted Housing Database, constructed by matching the addresses of all respondents in the 28-year PSID to a national census of assisted-housing addresses. The study also uses statistical techniques to correct for the fact that assisted-housing residents are not a random sample of the low-income population. Several major findings are reported in the study, including the following:

• Public housing does not have detrimental effects on the long-term self-sufficiency outcomes of youth.

• Public housing may have positive effects on a child's long-term self-sufficiency.

• Unobserved differences in family background of children who spent time in public housing contribute to their poorer outcomes.

• Public housing seems to have a stronger positive effect on children from families that are highly dependent on public assistance, suggesting that public housing is most beneficial for the most disadvantaged children.

The Long Term Effects of Housing Assistance on Self-Sufficiency, Final Report is available free from HUD USER. Use the order form.