Panel Paper: The Effects of Transfer Programs On Children's Outcomes: Evidence From a Randomized Housing Voucher Lottery

Saturday, November 10, 2012 : 10:15 AM
International C (Sheraton Baltimore City Center Hotel)

*Names in bold indicate Presenter

Brian Jacob, University of Michigan

This paper examines the causal effects of in-kind government resource transfers on children’s outcomes, using data from a randomized housing-voucher wait-list lottery conducted in Chicago in 1997.  Unlike with the Moving to Opportunity housing voucher experiment, where the offer of a voucher to families in public housing led to large changes in neighborhood environments, the families in our study sample are all in private-market housing at baseline, and for them voucher receipt represents a fundamentally different treatment:  vouchers lead to almost no change in neighborhood attributes, but generate very large increases in housing consumption and cash income (from reductions in out-of-pocket spending on housing).  We examine children’s outcomes using longitudinal administrative data from the Chicago Public Schools on student test scores, school grades, absences, school persistence, and dropout, and from Illinois State Police data on arrests from both the juvenile and adult justice systems. Preliminary findings tracking outcomes through 2005 found fairly precise zero impacts of voucher receipt on achievement test scores.  However housing vouchers reduce problem or criminal behavior among youth, particularly for males, and the monetized value of these benefits are relatively large compared to the government cost of the voucher subsidies.  Ignoring these types of behavioral impacts may lead analyst to understate the benefits associated with means-tested transfer programs more generally.  Our preliminary findings are also consistent with the idea that non-cognitive skills may be more malleable and susceptible to policy intervention over the life course than are cognitive skills. We are currently updating these results using administrative data that capture outcomes through 2012.