LETTER | Disincentive to Work - Section 8 voucher

Letter-Stamp Editor:

Do Section 8 Housing Vouchers help or hurt employment?

To gain some insight into the pros and cons of mandating that all Landlords accept Section 8 low income housing vouchers, I have been doing some basic digging for research data. I have read the comments of some claiming that this is a great program. I have read where others provide information from some research or university setting wherein they claimed it a failed program. Here's another twist that I haven't heard anything about. I found this and other articles claim disincentive to work. I provide some quotes from Spotlight on Poverty and Opportunity: The Source for News, Ideas and Action; Deven Carlson, Ph.D.

"SECTION 8 Voucher REDUCES EARNINGS" "The results of this research indicate that, on average, receipt of a Section 8 voucher reduces earnings by about ten percent in the initial year of receipt."

"When looking at these data, there are several features of the Section 8 program design that can explain this initial and pronounced negative effect on recipient earnings."

"NEGATIVE INCENTIVE TO WORK" "First, the voucher program requires participants to contribute 30 percent of their income towards rent. This provision is intended to ensure that, to the extent possible, recipients contribute to their housing costs. Yet it also effectively acts as a 30 percent tax on their earnings. As any economist will tell you, taxes create a negative incentive to work."

"CHOOSING TO WORK LESS HOURS" "Second, the rental subsidy provided by a Section 8 voucher increases recipients’ incomes, which may ultimately have a negative effect on recipient earnings. That’s because the increase in income may result in a phenomenon that economists refer to as “the income effect,” whereby voucher recipients choose to work fewer hours"

"[M]AY TAKE ACTIVE STEPS TO STAY BELOW [INCOME THRESHOLD]" "Third, to continue to receive a Section 8 voucher, individuals must fall below an income ceiling. Exceeding it by even a few dollars can jeopardize receipt of a voucher worth thousands of dollars annually. Voucher recipients are quite aware of this eligibility threshold, and may take steps to ensure they stay below it."

Quotations from: Spotlight on Poverty and Opportunity: The Source for News, Ideas and Action Lower Earnings: An Unintended Consequence of Section 8 Voucher Receipt Deven Carlson, University of Wisconsin-Madison - Posted November 28, 2011

Deven Carlson is a Ph.D. candidate in the Department of Political Science at the University of Wisconsin-Madison, a graduate research fellow for the Wisconsin Center for Education Research, and a graduate assistant for the Institute for Research on Poverty Karen Levenson