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Low-Income Housing Assistance: Its Impact on Labor Force and Housing Program Participation

Many studies in the 1970s and 1980s have examined the effects of the welfare systemon individual behavior. All of these studies fail to appropriately consider low income housingassistance. Most studies have either ignored housing assistance or have implicitly assumed thatthere is no rationing in this program. This paper presents a simple model that measures theimpact of rationing one public assistance program in the context of the entire benefit packageoffered to female-headed households. The results suggest that the neglect of controls for the rationing in the housingprograms accounts for a large part of the insensitivity of housing assistance found in pastresearch. Also, simulations suggest that the housing programs raise the disincentives of thewelfare package an additional twenty-one percent when compared to the entitlement portion ofthe package alone.