Increasing Education Prospects and Earning Potential for LIHTC Property Residents

LIHTC Residents

A new analysis focused on Ohioans living in Low Income Housing Tax Credit properties found that possessing a post-secondary degree or a vocational certificate is linked to significantly higher earnings. Low-income families face significant barriers to obtaining education and training, including the high cost of tuition, balancing unpredictable work schedules, and finding childcare. Thus the stable, affordable rents provided by LIHTC may help households prioritize or afford education. However, a persistent gender gap exists for low-income LIHTC residents, regardless of educational status.

To analyze the impact of education on earnings, OSU's Center for Human Resources Research created a unique dataset matching adult residents of LIHTC properties between 2015-2018 with wage data from Ohio Jobs and Family Services and education data from the Ohio Department of Higher Education.

Researchers found roughly a quarter of all matched adult OHFA tenants had some postsecondary education or training from a public college or technical center in Ohio1 and that higher education or training was related to higher wages at each level. Compared to residents with a high school degree, median earnings for those with any post-secondary or technical certification was 62.3% higher and 128% higher for those with a bachelor's degree or higher. The change in income was not related to a change in level of employment; LIHTC residents were employed at consistently high levels regardless of education. This suggests higher education or training is linked to higher wages, rather than increased access to work.

Education Level of Tenants Average Annual Earnings During Tenancy
Less than high school $5,844
At least high school $6,742
Some college $9,602
Post-secondary / technical cert $10,943
Associate's degree $14,005
Bachelor's degree or higher $15,409

Preliminary insights suggest the stability gained through safe, quality, affordable housing could pave a pathway for residents to seek out and complete education or training. Of the matched study sample, about 18% had completed higher education or vocational training overall; 12% pursued higher education or training while living in LIHTC housing. Even without education, living in a LIHTC unit appeared to slightly increase earnings. On average, earnings increased 11% from the year before tenancy to the year of tenancy, and 17% from the year of tenancy to the year after tenancy. When education or training occurred during tenancy, individuals had significantly higher earnings the following year.

These findings mirror national studies that suggest encouraging education or training may help low-income families find better paying jobs. There is space for collaboration between LIHTC rental providers and housing partners throughout the state to find ways to reduce these barriers and encourage educational attainment.

While overall findings are promising, gender disparities in income stand out in the analysis. Women were more likely to be working than their male counterparts at all education levels; however male residents earned more than women at all education levels. This pay gap increases with education and overall income. For those who received a post-secondary or technical degree, the gap in average annual earnings is $2,454 while the gap for those with a bachelor's degree is $2,734.

Education Level of Tenants Average Annual Earnings During Tenancy for Women Average Annual Earnings During Tenancy for Men Gap
Less than high school $7,291 $8,097 $806
At least high school $9,724 $11,478 $1,754
Some college $12,333 $14,791 $2,458
Post-secondary / technical cert $14,161 $16,615 $2,454
Associate's degree $16,792 $19,094 $2,302
Bachelor's degree or higher $19,552 $22,286 $2,734
Graduate degree $21,106 $24,583 $3,477

The gender gap in wages speaks to continued issues of female and family poverty in Ohio. Ohio ranks 29th nationally for the share of women in poverty. In 2017, 15.8% of female adults lived in poverty compared to only 13.0% of men. While this data focuses on the period prior to the COVID-19 crisis, we should anticipate this gender gap increasing in coming years, as women have been particularly vulnerable to job loss during the pandemic. Nearly 3 million American women left the workforce directly because of the pandemic, while men's employment stayed flat. As women, especially low-income women, are pushed out of the workforce -- even temporarily – the pay gap will likely increase.

As the state grapples with the long-term health and economic consequences of the COVID-19 crisis, special attention should be focused on establishing sustainable pathways to higher household income, especially among Ohio's low-income women.

1The data on higher education focused only on those who attended a public college in Ohio or an Ohio Technical Center, and for those who participated in Ohio’s Aspire training or who received services from an Ohio One Stop employment center. Information from out-of-state or private institutions is not available.