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

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  • Brian Jacob
  • Max Kapustin
  • Jens Ludwig
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    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.

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    Bibliographic Info

    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 20164.

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    Date of creation: May 2014
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    Handle: RePEc:nbr:nberwo:20164

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    References

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    1. Randall K. Q. Akee & William E. Copeland & Gordon Keeler & Adrian Angold & E. Jane Costello, 2010. "Parents' Incomes and Children's Outcomes: A Quasi-experiment Using Transfer Payments from Casino Profits," American Economic Journal: Applied Economics, American Economic Association, vol. 2(1), pages 86-115, January.
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    12. Sara Heller & Harold A. Pollack & Roseanna Ander & Jens Ludwig, 2013. "Preventing Youth Violence and Dropout: A Randomized Field Experiment," NBER Working Papers 19014, National Bureau of Economic Research, Inc.
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