Does Growing Up in Tax-Subsidized Housing Lead to Higher Earnings and Educational Attainment?
49 Pages Posted: 10 Dec 2019 Last revised: 13 Mar 2020
Date Written: March 11, 2020
This paper investigates the effects of the Low Income Housing Tax Credit (LIHTC) on residents of buildings qualifying for the credit. Specifically, it analyzes whether individuals who grow up in LIHTC housing are more likely to enroll in post-secondary education programs and have higher earnings as adults. Using administrative tax records, I find that each additional year spent in LIHTC housing as a child is associated with an average 3.9 percent increase in the likelihood of attending a higher education program for four years or more, and a 5.2 percent increase in future earnings. Furthermore, I find that there are heterogeneous effects when comparing individuals who live in LIHTC housing located in neighborhoods with different characteristics, and among families that have varying income levels and varying levels of housing security prior to moving into a LIHTC building. Based on this analysis, I conclude that the reason I see a positive LIHTC effect is likely that the housing subsidy provides families with a more stable living situation and with more disposable income.
Keywords: Low Income Housing, Tax Policy, Poverty and Welfare
JEL Classification: H20, I31, H53
Suggested Citation: Suggested Citation