Public Housing Assistance and Social Security Disability Program Participation: Do Housing Vouchers Crowd Out Disability Payments?

• In Event: Federal Rental Assistance: Markets, Mobility, and Well-Being

Abstract

The Department of Housing and Urban Development (HUD) and the Social Security Administration (SSA) both administer programs providing economic support to non-elderly individuals with disabilities. Yet we know little about interactions between these independently funded and administered programs and the resulting implications for both the economic security of individuals with disabilities and combined federal spending. We address this knowledge gap in two ways: first, we document stylized facts at the individual level of annual transitions between disability and housing program receipt, finding that there are substantial annual flows into and out of dual participation (participation in both disability programs and housing programs), especially between Supplemental Security Income (SSI) and federal housing programs. Second, we leverage ZIP code-level variation in HUD funding to local housing authorities arising from policy changes to rental ceilings for the Housing Choice Voucher program. We use the resulting change in the local supply of vouchers induced by this reform to estimate the causal impact of voucher use on SSI and Social Security Disability Insurance (SSDI) program participation at the ZIP code level.  

Across numerous specifications, we consistently find a strongly statistically significant negative relationship, where an increase in the supply of vouchers leads to fewer SSI and SSDI applications and lower SSI and SSDI rolls. We estimate a reduction of one SSI applicant for between 5 and 11 additional utilized vouchers, a reduction of one SSDI applicant for between 14 and 16 additional utilized vouchers, one fewer SSI recipient per 2.9 to 3.6 additional utilized vouchers, and one fewer SSDI recipient per 3.5 to 3.8 additional utilized vouchers. These effects are statistically significant for SSI receipt among the voucher recipient population as well, with approximately one third of the SSI recipiency effect accounted for by voucher holders being less likely to be SSI recipients. These results point to significant substitutability between disability income support and housing support programs, potentially mediated by local housing authorities themselves, which has important implications for interactions between federal programs supporting individuals with disabilities as well as reducing the net federal costs of funding additional housing vouchers.

Author

• Philip Armour, RAND School of Public Policy
  Presenting Author