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Substance Abuse and Mental Health Services Administration
The Effects of Federal and Local Housing Programs on the Transition From Welfare to Work: Evidence From New York City
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This article examines two hypotheses that explain how federal and local housing programs influence the transition from welfare to work. The enabling hypothesis suggests that housing programs provide residential stability and free resources for households to use for work-related expenses such as childcare and transportation.
Project-based housing programs may also provide more onsite support services that facilitate finding and keeping a job. The hindering hypothesis suggests that housing subsidies, many of which impose a high marginal tax on income, discourage employment. The location of subsidized housing projects may also hinder employment because of neighborhood crime, poverty, and distance from employment opportunities.

The authors’ results provide little support for either the enabling or hindering effects of housing programs on the transition from welfare to work in New York City. Although the lack of any effect on either employment or welfare participation may be due to the unique housing policy and market context of New York City, their results are consistent with a growing body of empirical research findings that public housing has few, if any, employment effects. (Authors)