Addicted to Government? The Impact of Housing Assistance on Program Participation of Welfare Recipients

This research addresses the question of whether housing assistance provided a perverse incentive for welfare recipients to remain on the rolls following the enactment of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996. Merging the 1996 Survey of Income and Program Participation (SIPP) with HUD's administrative records provides a unique opportunity to test whether recipients of housing assistance were more likely to stay on the welfare program four years after the enactment of PRWORA. This dataset contains a nationally representative sample of welfare recipients. Quarterly data, including sources of income, were obtained from these families of welfare recipients for four years. Results indicate that in an era of plunging welfare rolls, receipt of housing assistance did not account for those who remained on Temporary Assistance to Needy Families (TANF). These data show that housing assistance was not a perverse incentive to remain on welfare in the aftermath of the welfare reform of 1996. Instead, those who failed to exit the rolls four years after TANF was enacted had high obligations to children, lacked prior participation in the labor force, and lacked access to an automobile.