After its first 18 months, the Minnesota Family Investment Program (MFIP) produced substantial effects on the employment and earnings of single-parent, long-term recipients in urban areas. Subsequent analyses revealed that the program had notably different effects on recipients who were in public or subsidized housing at program entry compared with those who were not. Specifically, MFIP's impacts on employment and earnings were larger for the former group. This paper presents MFIP's 18-month impacts by housing status and examines several possible reasons for the pattern of impacts.

The results indicate that public and subsidized housing does provide benefits, such as residential stability, that may encourage employment, but that these benefits are unlikely to account for the pattern of MFIP’s impacts. The weight of the evidence, although indirect, suggests that another aspect of public and subsidized housing may be important. The work disincentive created by the rent rule may have led to a situation in which many residents in public and subsidized housing were especially responsive to MFIP’s employment incentives. The evidence on this issue is only suggestive, however, highlighting the need for further research on the interaction between public housing and welfare reform.