The Benefits to Taxpayers from Increases in Students - RAND ...

46 The Benefits to Taxpayers from Increases in Students’ Educational Attainment
how the amount of welfare benefits she receives would change as she ages. They peak
when she is in her late twenties and decrease steadily after that.
If the same woman earned a bachelor’s degree, at age 20 she would receive no
welfare benefits—a savings to the public budget of more than $300. The amount of
benefits she receives over her lifetime is represented by the bottom, dotted line on the
chart.
If the same woman in our example graduated from high school or attended some
college, her welfare benefits over the course of her lifetime would begin at around $100
per year at age 20, hold nearly steady for several years, and decline in middle age.
The most dramatic finding illustrated by the chart is that a Hispanic woman who
earns at least a high school diploma receives far less in welfare benefits over the course
of her lifetime than she would if she dropped out of high school. In addition, the difference
between high school graduation and dropping out is more dramatic than the
differences between any other of the levels of education in our study. This is true for all
groups, regardless of gender, race/ethnicity, and place of birth.
Effects of Educational Attainment on the Costs of Housing Subsidies
HUD maintains a public housing program through which it provides rental housing
to low-income families at low cost. In addition, HUD administers the Section 8 Rental
Voucher Program, which is intended to help very low-income families obtain decent
and safe rental housing. Eligibility for both of these programs relates to income level
and lack of available low-cost housing.
We consider the two programs—the public housing program and Section 8
Rental Voucher program—together in our analysis because they have similar criteria
for participation and come from the budget of the same federal department. According
to the SIPP data, 4 percent of individuals in 2002 resided in public housing, 2 percent
received rental assistance, and slightly less than 1 percent used both benefits. According
to our analysis of HUD data for 2002, per-resident cost of public housing and Section
8 programs averaged $2,233 per year.
The results show that the largest public saving in subsidized housing occurs
between high school dropouts and high school graduates, across all gender, race/
ethnicity, and place-of-birth groups. Figure 4.2 illustrates the results. It shows the difference
in the costs of annual public housing subsidies for a U.S-born Hispanic woman
as a function of her age and education level.
The savings in spending on housing for women who attain a higher level of education
are higher than for men, but by a margin of 50–100 percent, a much more
modest difference compared with the differences between men and women in most
other social support programs. The cost of a unit of housing is assumed to be the same
for men and women, so it may be that this difference is due to the fact that women use