Human Capital Effects of Anti-Poverty Programs: Evidence from a Randomized Housing Voucher Lottery

63 Pages Posted: 2 Jun 2014 Last revised: 7 Aug 2021

See all articles by Brian A. Jacob

Brian A. Jacob

University of Michigan at Ann Arbor

Max Kapustin

University of Michigan at Ann Arbor

Jens Ludwig

Georgetown University - Public Policy Institute (GPPI); National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Multiple version iconThere are 2 versions of this paper

Date Written: May 2014

Abstract

Whether government transfer programs increase the human capital of low-income children is a question of first-order policy importance. Such policies might help poor children if their parents are credit constrained, and so under-invest in their human capital. But it is also possible that whatever causes parents to have low incomes might also directly influence children's development, in which case transfer programs need not improve poor children's long-term life chances. While several recent influential studies suggest anti-poverty programs have larger human capital effects per dollar spent than do even the best educational interventions, identification is a challenge because most transfer programs are entitlements. We overcome that problem by studying the effects on children of a generous transfer program that is heavily rationed--means-tested housing assistance. We take advantage of a randomized housing voucher lottery in Chicago in 1997, for which 82,607 people applied, and use administrative data on schooling, arrests, and health to track children's outcomes over 14 years. We focus on families living in unsubsidized private housing at baseline, for whom voucher receipt generates large changes in both housing and non-housing consumption. Estimated effects are mostly statistically insignificant and always much smaller than those from recent studies of cash transfers, and are smaller on a per dollar basis than the best educational interventions.

Suggested Citation

Jacob, Brian A. and Kapustin, Max and Ludwig, Jens, Human Capital Effects of Anti-Poverty Programs: Evidence from a Randomized Housing Voucher Lottery (May 2014). NBER Working Paper No. w20164, Available at SSRN: https://ssrn.com/abstract=2444531

Brian A. Jacob (Contact Author)

University of Michigan at Ann Arbor ( email )

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Max Kapustin

University of Michigan at Ann Arbor ( email )

500 S. State Street
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Jens Ludwig

Georgetown University - Public Policy Institute (GPPI) ( email )

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National Bureau of Economic Research (NBER)

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