From Housing Assistance to Student Debt: the Effects of Government Aid on Household Behavior and Welfare

This dissertation consists of three chapters that study the effects of government assistance on household behavior and welfare. The first chapter studies the effect of the Housing Voucher Program (Section 8) on household behavior and welfare. Policymakers and researchers continuously debate the optimal structure and scope of the U.S. Housing Voucher Program. The current program features an inverse relation between subsidies and recipients' income, a high degree of rationing, and a limited scope of voucher usage. This chapter studies the effect of the Housing Voucher Program on low-income household behavior and welfare. Using several household datasets, I specify and estimate a lifecycle model that characterizes the effects of housing vouchers. Then I examine how a set of policy reforms affect household labor supply, marriage, homeownership, and well-being. The second chapter investigates the role of job mismatch, wage dispersion, student debt, family background, and preferences in accounting for the rise in parental coresidence rates over time. Parental coresidence rates for college graduates have risen substantially over the last twenty five years, from 25% average coresidence rate for 23-27 years old for 1996 graduation cohort to over 31% for the 2014 graduation cohort. We develop a structurally estimated model of child parent decisions to study the quantitative effect of job mismatch, wage dispersion, student debt, family background, and preferences on coresidence rates. The third chapter examines the effect student debt on marriage and homeownership among college graduates. Student debt for the current college cohort has increased in terms of number of debtors and average amount, which subsequently impacts family formation and homeownership. Using NLSY 79 and NLSY 97 data, we develop and estimate a lifecycle model to quantify the role of student debt in college graduates' marriage and homeownership patterns. Beyond student debt, we also examine the role of housing prices, wage dispersion, and downpayment rates in accounting for the difference in homeownership and marriage