“Moving to Work” Demonstration May Not Boost Work

Policymakers negotiating 2016 funding legislation will have to decide whether to include a provision from a Senate appropriations bill sharply expanding the Moving to Work (MTW) demonstration.  Proponents claim that expanding MTW would increase work among participants in the housing voucher and public housing programs.  But data from the 39 state and local housing agencies participating in MTW — which allows agencies to waive most program rules and receive funding via special block-grant formulas so they can test alternative policies related to work and other areas — raise serious doubts.

Working-age, non-disabled recipients of rental assistance at MTW agencies were four percentage points less likely to work in 2014 than those at non-MTW agencies, CBPP analysis of Department of Housing and Urban Development (HUD) data finds.  And the gap grows slightly if you control for unemployment rates in the metropolitan areas where MTW agencies are located.  

To be sure, this doesn’t show that MTW discourages work, since we don’t know all the factors that drive employment rates at MTW and non-MTW agencies.  But it underscores the need for skepticism about claims that expanding MTW would boost employment.

While MTW focuses on deregulation rather than employment, many MTW agencies have taken some measures to support work.  These have generated many anecdotal claims of success and some promising results, and some may have been effective.  But almost none have been rigorously evaluated, so there’s little definitive information showing their impact on work — or whether they have adverse side effects, such as raising program costs or causing hardship for children and others.  For example, some MTW agencies have imposed work requirements or time limits on housing assistance, but they generally don’t track families who lose assistance due to those policies to determine whether they face homelessness or other hardship. 

We’ve noted serious adverse effects of MTW policies more generally, including leaving over 60,000 vulnerable families without vouchers that are crucial to protecting children from homelessness and raising rents on extremely poor families who already struggle to make ends meet. 

Most rental assistance recipients are elderly, have disabilities, or work.  Nonetheless, we should examine ways to help more recipients find and keep jobs and help those already working to raise their earnings, without making rental assistance less effective in enabling vulnerable families to keep a roof over their heads.  HUD is conducting an experimental evaluation of one promising employment initiative (the Family Self-Sufficiency program) and scaling up another initiative that has already been rigorously tested (the Jobs-Plus initiative).

MTW agencies could also help identify policies that promote employment.  But policymakers should not adopt the Senate bill’s approach of simply expanding MTW without reforms to better determine which MTW policies actually work.  If they expand MTW, they should require experimental evaluation of major policy changes such as work requirements and time limits — while also instituting other reforms to stem the loss of vouchers and protect vulnerable families.