Project:
The Interactive Effects of Food Stamps and Housing Assistance

Year: 2001

Research Center: Joint Center for Poverty Research, University of Chicago and Northwestern University

Investigator: Harkness, Joseph, and Sandra Newman

Institution: Institute for Policy Studies, Johns Hopkins University

Project Contact:
Joseph Harkness, Research Statistician
Johns Hopkins University
Institute for Policy Studies
3400 N. Charles Street
Baltimore, MD 21218
Phone: 410-516-6530
Fax: 410-516-8233
joe.harkness@jhu.edu

The Food Stamp Program (FSP) and housing assistance are two of the largest Federal in-kind transfer programs for the poor, and the overlap in the clientele of the two programs is substantial. In 1999, about 38 percent of food stamp recipients also received housing assistance, and 30 percent of housing assistance recipients used food stamps. Unfortunately, virtually no research exists on the combined effects of the two programs. The authors examined the effect of housing assistance on food expenditures both for recent food stamp recipients and nonrecipients.

This study used data from the Panel Study of Income Dynamics that was address-matched to a census of assisted housing units over the period 1968-93 to identify housing assistance recipients. The following characteristics were examined: (1) out-of-pocket food spending per household member for food consumed at home, (2) food stamp benefits per person for households that receive food stamp benefits, (3) total out-ofpocket food spending plus food stamp benefits per person, and (4) total family income. Changes in these characteristics that occurred between the 2 years just before and the 2 years just after a family moved into assisted housing were compared with changes that occurred over a similar period for a matched set of families who did not move into assisted housing, thereby statistically controlling for other characteristics. Separate models were estimated for two major types of Federal housing assistance programs: public housing and privately owned housing that was built or renovated using Federal subsidies.

The authors found that both types of housing assistance increased FSP participation and benefit levels for those not receiving food stamps at the time they initially received housing assistance, but did not prolong or increase it for those already receiving food stamps. Public housing reduced out-of-pocket and total food spending among those already receiving food stamps. But among those not already receiving food stamps, public housing tended to raise food spending because it increased food stamp participation rates. Privately owned assisted housing had no statistically significant effects on total or out-of-pocket food spending.

Those who move into public housing are more disadvantaged than other housing assistance recipients, which is why public housing has a different effect on food stamp recipients and nonrecipients. Food stamp recipients who move into public housing have the lowest income of all groups, and their income drops sharply after they move. It may be that the income loss is cutting into the food budgets of this group. In contrast, in the period before the move, food stamp nonrecipients who move into public housing spent less on food than any other group. The large increase in their food stamp participation and benefits connected to the move into public housing may have helped to ensure adequate spending.

The study results indicated that those who move into either type of assisted housing experience a decrease in income. The magnitude of this income loss is about the same for food stamp recipients as it is for nonrecipients. Thus, the work disincentive effects of housing assistance do not appear to be magnified for food stamp recipients.

The implications of this research for food and nutrition assistance programs are mixed. On the positive side of the ledger, there is no evidence that the work disincentive effects of housing assistance are magnified in the presence of food stamps. In addition, housing programs appear to serve as a conduit into food assistance programs, helping nonrecipients gain food stamp benefits for which they are eligible. Public housing, which raised the food expenditures of those not receiving food stamps when they moved in, is especially notable in this regard. These considerations suggest complementary roles for housing and food assistance programs.

On the negative side is the income decline associated with moving into assisted housing. For food stamp recipients who move into public housing, the income drop may contribute to reduced spending on food. This income decline may also explain, at least in part, why privately owned assisted housing fails to increase food expenditures. Additional research is needed to understand why incomes decline when families move into assisted housing and to examine more closely whether the drop in income contributes to the failure of housing assistance to increase food spending for most groups.