Authors: Gary Painter
Fannie Mae Foundation
Many studies in past decades have examined the effects of the welfare system on individual behavior, but failed to appropriately consider low-income housing assistance. Most have either ignored housing assistance or implicitly assumed there is no rationing in this program. This article presents a simple model that measures the impact of rationing one public assistance program in the context of the entire benefit package offered to female-headed households. Results suggest that the neglect of controls for the rationing in the housing programs accounts for a large part of the insensitivity of housing assistance found in past research. Also, simulations suggest that the housing programs raise the disincentives of the welfare package an additional 21 percent when compared with the entitlement portion of the package alone.
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