Employment Cost of Dislocation: hope VI in Atlanta Bulent Anil David Sjoquist Sally Wallace Corresponding author

Bulent Anil

David Sjoquist

Sally Wallace

David L. Sjoquist

404-651-3995 (phone)

404-651-0416 (fax)
Andrew Young School of Policy Studies

14 Marietta Street, NW

P.O. Box 3993

Georgia State University

Atlanta, GA 30302-3992
Abstract:

Employment Cost of Dislocation: HOPE VI in Atlanta

Federal housing programs may have a variety of impacts on recipients, ranging from reducing migration, to affecting family size and formation, to labor supply behavior, to education. The impacts of housing assistance on the labor supply of assisted families have been widely analyzed by researchers. Many researchers argue that “any means-tested program negatively affects the labor market outcomes of recipients” (Lubell et. al., 2003). However, many empirical studies show that the association between housing assistance and employment is controversial. Keane and Moffitt (1998) employ a SIPP dataset, and find no effect of housing assistance on the labor supply of single mothers. On the other hand, Fischer (2000) uses the PSID, and finds a negative effect of housing assistance on employment and earnings among mothers on welfare rolls. Similarly, Ong (1998) finds a negative relationship between employment outcomes and public housing assistance. Painter (2001) employs SIPP, and finds no effect of housing assistance on labor force participation. Oreopoulos (2001) rejects the hypothesis that public housing participation has a negative effect on labor market outcomes in his study. Accounting for the in-kind nature of public housing assistance, Schone (1992) estimates an increase in labor supply of public house residents. Reingold, Van Ryzin, and Ronda (2001) find negative effects of public housing assistance on residents’ labor supply, nevertheless the effect is trivial.

Public housing is one of the most debated types of housing assistance in the U.S. Critics unanimously argue that public housing is characterized by concentrated poverty. Corcoran and Heflin (2003) find that public housing residents are more likely to be on the welfare roll as a child than unassisted renters, and also have longer histories of welfare receipt. Corcoran and Heflin’s study also shows that female residents in public housing have lower human capital than women in private market, and women in public housing are less likely to have a driver license. Reingold, Van Ryzin, and Ronda (2001) found that public housing is associated with the creation of neighborhood nuisances.

Congress planned the Urban Revitalization Demonstration Program, known as HOPE VI, in 1992 to renovate or demolish distressed public housing. According to the program, 6 % of severely distressed Public Housing Unit (approximately 86, 000 units) will be demolished initially (Popkin et al., 2004). Prior to HOPE VI, there were three major residential relocation programs in United States: Gautreaux Program, Moving to Opportunity (MTO), and Section 8. Johnson, Ladd, and Ludwig (2002) review the studies on residential re-location programs (Gautreaux, MTO, and Yonkers) and conclude that relocation of low-income neighborhood residents reduces welfare dependency, increases educational attainment, and improves the health status of its residents. DeLuca and Rosenbaum (2003) study the long run effects of Gautreaux Program on participants, and find permanent labor market impacts on participants. They also show that participants choose to live in the neighborhoods with similar racial composition to their original assignment if they move. Additionally, relocation increases the self-efficacy (Rosenbaum, Reynolds, and DeLuca; 2002), and employment rate (Rosenbaum, 1995) of Gautreaux participants. Correspondingly, Katz, Kling, and Liebman (2001) and Ludwig, Duncan, and Hirshfield (2001) find positive effects of MTO program on participants.

The HOPE VI program not only targets the physical conditions of public housing projects, but also the social and economic environment of public housing residents. Prior studies show that the distressed neighborhoods of public housing projects negatively affects the labor market outcomes, education, criminal behavior, and health of public housing residents (Wilson, 1987; 1996). Higher levels of economic and racial segregation, high crime rate, and unemployment are among the most common problems that a public housing resident is likely to face in severely distressed public housing projects (Popkin et al., 2004; Salama, 1999).

Unlike other re-location programs, few studies have dealt with the results of HOPE VI program. Zielenbach (2002) reports an improvement in the neighborhood of eight public housing projects, in which revitalization took place. Using the HOPE VI Panel Study Baseline and HOPE VI Panel Study Follow-up, Levy and Kaye (2004) find no significant change in employment rates, a slight increase in earnings of employed, and some changes in employment pattern (some employed residents are unemployed after re-location, while some unemployed become employed). Popkin, Eiseman, and Cove (2004) find better education outcomes for re-located children using the same data.

Another recent study has been done by Brian A. Jacob (2004), who analyzes the effects of Chicago Public housing demolitions on educational outcomes of residents. He does not find a significant change in academic achievement, and finds a light decrease in the likelihood of dropping out for children under age 14. That result contradicts with the outcomes of other relocation programs. Jacob interprets this contradiction as a result of obligatory move feature of relocation.

The HOPE VI program involves a transformation/reconstruction process for severely distressed public housing projects, which conveys an obligatory move for public housing residents who live in those housing projects. The move generates a short term cost for all public housing residents such as physical cost of moving, loss of networks (e.g. childcare), psychological cost etc., which could influence, among other behaviors, the labor force participation of displaced residents. Similarly, residents could alter their existing job search pattern in their new location or their proximity to the current/potential jobs could change because of moving. Due to the move, it is expected that public housing residents of HOPE IV projects will have a higher probability of unemployment in post-move period versus their prior residency period, depending, among other things, on their employment history. Our study explores the employment probability of public housing residents of Atlanta, including those who are forced to move because of the HOPE VI project.

The data for this study are drawn from complete housing records of the Atlanta Housing Authority (AHA) and individual level employment records of Georgia Department of Labor (GDOL). Merging these datasets with individual records of Georgia Department of Human Resources (GDHR), we construct a panel dataset ranging from 1995 to 2003. The data include detailed administrative data on employment (through the GDOL records), family structure, family size, age and race of all household members, identification of head of household, from the AHA data file, and other income information from the GDHR file. That panel data set is organized quarterly, and allows us to trail the variation in labor market participation of public housing residents following the move.

Our data contain 50,533 individuals who are participates of one of the housing assistance programs: Certificate, choice, or public housing. 23,497 of these individuals have lived in one of 58 different public housing projects in Atlanta anytime between 1995 and 2003. Among 58 housing projects, 7 of them ( Techwood Homes, Clark Howell Homes, East Lake Meadow, Carver Homes, Perry Homes, Harris Homes, and Capitol Homes) were revitalized/demolished between 1995 and 2003 either by the HOPE VI program or HOPE VI-like programs.

Our dataset is therefore a rich panel study of all Atlanta public housing residents over a nine-year period. The supplement of administrative labor and welfare data allows us to analyze the impact of the HOPE VI-induced move on labor supply, unemployment duration, and the interaction of post-HOPE VI choices on the longevity of labor supply. The individual-level observations of our data, the panel nature of our study, and the additional administrative labor data allows us to fill some gaps in the current analyses on the impact of public housing policy changes on long-term labor supply.

The paper is in process. We have constructed the data set, drafted the review of the literature, constructed the empirical methodology, and estimated some initial regressions.

REFERENCES

DeLuca, Stefanie, and James E. Rosenbaum (2003) “If Low-Income Blacks Are Given a Chance to Live in White Neighborhoods, Will They Stay? Examining Mobility Patterns in a Quasi-experimental Program with Administrative Data” Housing Policy Debate, 14(3), 305-345

Johnson, Michael P., Helen F. Ladd, Jens Ludwig (2002) “The Benefits and Costs of Residential Mobility Programmes for the Poor” Housing Studies, 17(1), 125-138

Levy, Diane , Deborah R. Kaye (2004) “How Are HOPE VI Families Faring? Income and Employment” Urban Institute Press

Lubell, Jeffrey M., Mark Shroder, Barry Steffen (2003) “ Work Participation and Length of Stay in HUD-Assisted Housing” Cityscape: A Journal of Policy Development and Research, 6(2), 207-223

Ludwig, Jens, Greg Duncan, and Paul Hirshfield (2001) "Urban Poverty and Juvenile Crime: Evidence from a Randomized Housing-Mobility Experiment," Quarterly Journal of Economics, CXVI, 655-680

Ong, Paul (1998) “Subsidized Housing and Work among Welfare Recipients” Housing Policy Debate, 9(4), 775-794

Oreopoulos, Philip (2003) “The Long-Run Consequences of Living in a Poor Neighborhood” Quarterly Journal of Economics, 2003, 118(4), 1533-1575

Painter, Gary (2001) “Low-Income Housing Assistance: Its Impact on Labor Force and Housing Program Participation” Journal of Housing Research, 2001, 12(1), 1-26

Popkin, Susan J., Bruce Katz , Mary K. Cunningham , Karen D. Brown , Jeremy Gustafson , Margery Austin Turner (2004) “A Decade of HOPE VI: Research Findings and Policy Challenges” Urban Institute Press

Popkin, Susan J., Michael Eiseman , Elizabeth Cove (2004) “How Are HOPE VI Families Faring? Children” Urban Institute Press

Wilson, William J. (1987) The Truly Disadvantaged, Chicago: The University of Chicago Press