Does Growing Up in Tax-subsidized Housing Lead to Higher Earnings and Educational Attainment?

Elena Derby ()
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Elena Derby: Department of Economics, Georgetown University ; Joint Committee on Taxation

Working Papers from Georgetown University, Department of Economics

Abstract: 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 kid is associated with a 3.5 percent increase in the likelihood of attending a higher education program for four years or more, and a 3.2 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 levels of housing security prior to entering a LIHTC building. Based on this analysis, I conclude that the driving mechanism behind the positive estimated LIHTC effect is likely that the housing subsidy provides families with a more stable living situation.

Keywords: Low Income Housing; Tax Policy; Poverty and Welfare (search for similar items in EconPapers)
JEL-codes: H20 H53 I31 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2019-11-22
New Economics Papers: this item is included in nep-lab, nep-pbe and nep-ure
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