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Subsidized housing during childhood linked with higher earnings in adulthood

A study from the American Economic Journal finds that participating in the Housing Choice Vouchers (HCV) program or public housing as a teenager is linked with higher earnings at age 26. The authors construct an ambitious and detailed longitudinal dataset drawing on confidential demographic, employment, and location data from the U.S. Census Bureau and administrative housing voucher data. Examining low-income renter households with children aged 13 to 18 in the 2000 Census allowed authors to link data across files and for the resulting dataset to be representative of the housing-subsidy eligible population. Although prior research has deemed housing subsidies a poor investment, the authors suggest that not accounting for selection effects—that people with certain characteristics are more likely to use subsidized housing and to have similar later-life outcomes—has driven this finding. To address, authors explore only variation in subsidized housing use within households across sibling pairs. Growing up in the same household but participating unevenly in housing programs, allows authors to handle those selection effects and focus on program effects. The authors estimate that each additional year of public housing residence increases earnings at age 26 by 6 percent, while each year of voucher-assisted housing increases earnings by 2.7 percent for males and 4.7 for females. In general, earlier entry and later exit from subsidized programs predicts better adulthood outcomes, leading authors to suggest the effect of subsidized housing in early childhood is an important area of future research.