Exploring the Effects of Work Requirements at a Small Illinois Housing Authority | How Housing Matters

Exploring the Effects of Work Requirements at a Small Illinois Housing Authority

February 20, 2019  
 
 
 

As the US Department of Housing and Urban Development (HUD) prioritizes programs to help households receiving rental assistance achieve economic self-sufficiency, researchers, policymakers, and advocates debate the utility of work requirements as an effective pathway toward economic self-sufficiency and the risks of offering rental assistance on a conditional basis. This study contributes additional evidence suggesting that work requirements, when implemented gradually and in context with hardship exemptions and local supports, can boost annual household income, earnings, and the adult-employment ratio* for low-income households with no work history. But work requirements have little effect on those with prior earnings.

In 2013, the Housing Authority of Champaign County (HACC), Illinois, launched a Local Self-Sufficiency (LSS) program through HUD’s Moving to Work demonstration program. The LSS mandated work requirements and Family Self-Sufficiency program participation for all assisted households with nondisabled, working-age adults. With exceptions for emergencies, job transitions, and other hardships, each eligible member of a household was required to work or attend a training or educational program for a minimum of 20 hours a week. Households that failed to meet these requirements were at risk of losing their housing assistance, but the requirements would be phased in over six years. The first year called for self-sufficiency goal-setting. In the second year, one eligible household member needed to work or attend training. By the fourth year, one eligible household member needed to work, while other eligible household members could work or attend training. By the sixth year, all eligible household members were required to work.

Using HUD, US Census Bureau, and housing authority data from one year before and one year after the program’s implementation, this study assessed the program’s effects on 1,112 eligible households, relative to a comparison group of assisted households in a neighboring county where the housing authority did not institute work requirements. Researchers adjusted the analysis to account for differences between the participating households and the comparison group, and they assessed how the program’s effects varied based on households’ demographic characteristics. Because of the study’s timing relative to program implementation, the authors did not analyze the relationship between work requirements and sanctions.

Key findings

  • Total annual income, earnings, and the adult-employment ratio increased for LSS households at a higher rate than for households from the comparison group.
  • The total annual income of LSS households increased by $1,930 more than the comparison group, on an adjusted basis. Income includes earnings and other sources.
  • Annual earnings among LSS households increased by $2,283 more than the comparison group.
  • The adult-employment ratio among LSS households increased by 11.6 percentage points more than the comparison group.
  • The LSS program had a greater effect on households with no prior work history, increasing their earnings by $3,248 and the adult-employment ratio by 14.9 percentage points. The program did not, however, have statistically significant effects on those with some prior earnings.
  • Other factors associated with higher income and earnings included having higher income and earnings at the start of the program. Households with more children or young children were more likely to have lower income and earnings. Adding one child to a household reduced earnings by $1,244.
  • Because of income-based rents, the added income from LSS participation increased HACC’s rent revenue. The authors calculate that LSS could allow HACC to serve an additional 98 LSS-eligible households for a year.
  • These findings may inform decisionmaking by other small housing authorities entering the Moving to Work program.

*The adult-employment ratio is the number of working-age household members with employment divided by the number of working-age household members in the household.

Photo by littlenySTOCK/Shutterstock

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Source: Housing Policy Debate
Author: Han Bum Lee, Paul E. McNamara
Publication Date: 2018
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