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Where to Build Affordable Housing?
Evaluating the Tradeoffs of Location
December 2023
Working Paper Number:
CES-23-62R
How does the location of affordable housing affect tenant welfare, the distribution of assistance, and broader societal objectives such as racial integration? Using administrative data on tenants of units funded by the Low-Income Housing Tax Credit (LIHTC), we first show that characteristics such as race and proxies for need vary widely across neighborhoods. Despite fixed eligibility requirements, LIHTC developments in more opportunity-rich neighborhoods house tenants who are higher income, more educated, and far less likely to be Black. To quantify the welfare implications, we build a residential choice model in which households choose from both market-rate and affordable housing options, where the latter must be rationed. While building affordable housing in higher-opportunity neighborhoods costs more, it also increases household welfare and reduces city-wide segregation. The gains in household welfare, however, accrue to more moderate-need, non-Black/Hispanic households at the expense of other households. This change in the distribution of assistance is primarily due to a 'crowding out' effect: households that only apply for assistance in higher-opportunity neighborhoods crowd out those willing to apply regardless of location. Finally, other policy levers'such as lowering the income limits used for means-testing'have only limited effects relative to the choice of location.
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The Economic Geography of Lifecycle Human Capital Accumulation: The Competing Effects of Labor Markets and Childhood Environments
November 2023
Working Paper Number:
CES-23-54
We examine how place shapes the production of human capital across the lifecycle. We ask: do those places that most effectively produce human capital in childhood also have local labor markets that do so in adulthood? We begin by modeling wages across place as driven by 1) location-specific wage premiums, 2) adult human capital accumulation due to local labor market exposure, and 3) childhood human capital accumulation. We construct estimates of location wage premiums using AKM style estimates of movers across US commuting zones and validate these estimates using evidence from plausibly exogenous out migration from New Orleans in response to Hurricane Katrina. Next, we examine differential earnings trajectories among movers to construct estimates of human capital accumulation due to labor market exposure. We validate these estimates using wage changes of multi-time movers. Finally, we estimate the impact of place on childhood human capital production using age variation in moves during childhood. Crucially, our estimates of location wage premiums and adult human capital accumulation allow us to construct estimates of the causal effect of place during childhood that are not confounded by correlated labor market exposure. Using these estimates, we show there is a tradeoff between those places that most effectively produce human capital in childhood and the local labor markets that do so in adulthood. We find that each 1-rank increase in earnings due to adult labor market exposure trades off with a 0.43 rank decrease in earnings due to the local childhood environment. This pattern is closely linked to city size, as adult human capital accumulation generally increases with city size, while childhood human capital accumulation falls. These divergent trajectories are associated with differences in both the physical structure of cities and the nature of social interaction therein. There is no tradeoff present in the largest cities, which provide greater exposure to high-wage earners and higher levels of local investment. Finally, we examine how these patterns are reflected in local rents. Location wage premia are heavily capitalized into rents, but the determinants of lifecycle human capital accumulation are not.
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When and Why Does Nonresponse Occur? Comparing the Determinants of Initial Unit Nonresponse and Panel Attrition
September 2023
Working Paper Number:
CES-23-44
Though unit nonresponse threatens data quality in both cross-sectional and panel surveys, little is understood about how initial nonresponse and later panel attrition may be theoretically or empirically distinct phenomena. This study advances current knowledge of the determinants of both unit nonresponse and panel attrition within the context of the U.S. Census Bureau's Survey of Income and Program Participation (SIPP) panel survey, which I link with high-quality federal administrative records, paradata, and geographic data. By exploiting the SIPP's interpenetrated sampling design and relying on cross-classified random effects modeling, this study quantifies the relative effects of sample household, interviewer, and place characteristics on baseline nonresponse and later attrition, addressing a critical gap in the literature. Given the reliance on successful record linkages between survey sample households and federal administrative data in the nonresponse research, this study also undertakes an explicitly spatial analysis of the place-based characteristics associated with successful record linkages in the U.S.
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Eviction and Poverty in American Cities
July 2023
Working Paper Number:
CES-23-37
More than two million U.S. households have an eviction case filed against them each year.
Policymakers at the federal, state, and local levels are increasingly pursuing policies to reduce the number of evictions, citing harm to tenants and high public expenditures related to homelessness. We study the consequences of eviction for tenants using newly linked administrative data from two major urban areas: Cook County (which includes Chicago) and New York City. We document that prior to housing court, tenants experience declines in earnings and employment and increases in financial distress and hospital visits. These pre-trends pose a challenge for disentangling correlation and causation. To address this problem, we use an instrumental variables approach based on cases randomly assigned to judges of varying leniency. We find that an eviction order increases homelessness and hospital visits and reduces earnings, durable goods consumption, and access to credit in the first two years. Effects on housing and labor market outcomes are driven by impacts for female and Black tenants. In the longer-run, eviction increases indebtedness and reduces credit scores.
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Using Restricted-Access ACS Data to Examine Economic and Noneconomic Factors of Interstate Migration By Race and Ethnicity
March 2023
Working Paper Number:
CES-23-12
We explore how determinants of internal migration differ between Black non-Hispanics, White non-Hispanics, and Hispanics using micro-level, restricted-use American Community Survey (ACS) data matched to data on attributes of sub-geographies down to the county level. This paper extends the discussion of internal migration in the U.S. by not only observing relationships between economic and noneconomic factors and household-level propensities to migrate, but also how these relationships differ across race and ethnicity within smaller geographies than have been explored in previous literature. We show that when controlling for household and location characteristics, minorities have a lower propensity to migrate than White households and document nuances in the responsiveness of internal migration to individual and locational attributes by racial and ethnic population subgroups.
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The Long-run Effects of the 1930s Redlining Maps on Children
December 2022
Working Paper Number:
CES-22-56
We estimate the long-run effects of the 1930s Home Owners Loan Corporation (HOLC) redlining maps by linking children in the full count 1940 Census to 1) the universe of IRS tax data in 1974 and 1979 and 2) the long form 2000 Census. We use two identification strategies to estimate the potential long-run effects of differential access to credit along HOLC boundaries. The first strategy compares cross-boundary differences along HOLC boundaries to a comparison group of boundaries that had statistically similar pre-existing differences as the actual boundaries. A second approach only uses boundaries that were least likely to have been chosen by the HOLC based on our statistical model. We find that children living on the lower-graded side of HOLC boundaries had significantly lower levels of educational attainment, reduced income in adulthood, and lived in neighborhoods during adulthood characterized by lower educational attainment, higher poverty rates, and higher rates of single-headed households.
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The Effect of Housing Assistance Program on Labor Supply and Family Formation
August 2022
Working Paper Number:
CES-22-35
This paper studies the effect of U.S. Housing Choice Voucher Program Section 8 on low-income people' labor supply and family formation. I analyse this effect using data from the 2014 Panel and 2018 Panel of the restricted-use Survey of Income and Program Participation (SIPP). My economic approach is to explore the policy which assigns housing vouchers based on an income cutoff as an instrument to study the effect of housing vouchers on low-income people's employment and family formation. The assignment policy states that households with income lower than 50% of the median income for the MSA area are eligible for housing vouchers. With household eligibility status, I compare the households whose income is slightly below the income cutoff (eligible households) with the households whose income is slightly above the income cutoff (ineligible household) to identify the effect of housing vouchers on employment and family formation. I find that housing vouchers have a negative impact on individual labor supply through both extensive and intensive margins. In addition, housing vouchers also negatively impact family formation by decreasing marriage and increasing divorce rates. This project will contribute to understanding the effect of Section 8 Housing Vouchers on low-income households' labor supply and family formation.
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The Radius of Economic Opportunity: Evidence from Migration and Local Labor Markets
July 2022
Working Paper Number:
CES-22-27
We examine the geographic incidence of local labor market growth across locations of childhood residence. We ask: when wages grow in a given US labor market, do the benefits flow to individuals growing up in nearby or distant locations? We begin by constructing new statistics on migration rates across labor markets between childhood and young adulthood. This migration matrix shows 80% of young adults migrate less than 100 miles from where they grew up. 90% migrate less than 500 miles. Migration distances are shorter for Black and Hispanic individuals and for those from low income families. These migration patterns provide information on the first order geographic incidence of local wage growth. Next, we explore the responsiveness of location choices to economic shocks. Using geographic variation induced by the recovery from the Great Recession, we estimate the elasticity of migration with respect to increases in local labor market wage growth. We develop and implement a novel test for validating whether our identifying wage variation is driven by changes in labor market opportunities rather than changes in worker composition due to sorting. We find that higher wages lead to increased in-migration, decreased out-migration and a partial capitalization of wage increases into local prices. Our results imply that for a 2 rank point increase in annual wages (approximately $1600) in a given commuting zone (CZ), approximately 99% of wage gains flow to those who would have resided in the CZ in the absence of the wage change. The geographically concentrated nature of most migration and the small magnitude of these migration elasticities suggest that the incidence of labor market conditions across childhood residences is highly local. For many individuals, the 'radius of economic opportunity' is quite narrow.
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Comparing the 2019 American Housing Survey to Contemporary Sources of Property Tax Records: Implications for Survey Efficiency and Quality
June 2022
Working Paper Number:
CES-22-22
Given rising nonresponse rates and concerns about respondent burden, government statistical agencies have been exploring ways to supplement household survey data collection with administrative records and other sources of third-party data. This paper evaluates the potential of property tax assessment records to improve housing surveys by comparing these records to responses from the 2019 American Housing Survey. Leveraging the U.S. Census Bureau's linkage infrastructure, we compute the fraction of AHS housing units that could be matched to a unique property parcel (coverage rate), as well as the extent to which survey and property tax data contain the same information (agreement rate). We analyze heterogeneity in coverage and agreement across states, housing characteristics, and 11 AHS items of interest to housing researchers. Our results suggest that partial replacement of AHS data with property data, targeted toward certain survey items or single-family detached homes, could reduce respondent burden without altering data quality. Further research into partial-replacement designs is needed and should proceed on an item-by-item basis. Our work can guide this research as well as those who wish to conduct independent research with property tax records that is representative of the U.S. housing stock.
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Neighborhood Income and Material Hardship in the United States
January 2022
Working Paper Number:
CES-22-01
U.S. households face a number of economic challenges that affect their well-being. In this analysis we focus on the extent to which neighborhood economic conditions contribute to hardship. Specifically, using data from the 2008 and 2014 Survey of Income and Program Participation panel surveys and logistic regression, we analyze the extent to which neighborhoods income levels affect the likelihood of experiencing seven types of hardships, including trouble paying bills, medical need, food insecurity, housing hardship, ownership of basic consumer durables, neighborhood problems, and fear of crime. We find strong bivariate relationships between neighborhood income and all hardships, but for most hardships these are explained by other household characteristics, such as household income and education. However, neighborhood income retains a strong association with two hardships in particular even when controlling for a variety of other household characteristics: neighborhood conditions (such as the presence of trash and litter) and fear of crime. Our study highlights the importance of examining multiple measures when assessing well-being, and our findings are consistent with the notion that collective socialization and community-level structural features affect the likelihood that households experience deleterious neighborhood conditions and a fear of crime.
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