Shenyang Guo

Homeownership and Wealth among Low- and Moderate-Income Households

Using data from a set of low- and moderate-income homeowners who received prime mortgages through the Community Advantage Program panel and a matched set of renters, we assess the effect of sustained homeownership on net worth and components of net worth. In this article, our aim is to test the claim that, all else being equal, investing in and maintaining ownership of a home yield higher short-term increases in net worth and other measures of economic well-being than do renting and choosing other forms of investment and consumption. We attempt to isolate the effect of homeownership from the factors that cause both homeownership and increases in wealth using three matching approaches that address sample selection and endogeneity in the data. After balancing renters and owners on observed characteristics and adjusting for influential outlying cases, we find that low- and moderate-income homeowners experience greater short-run increases in net worth, assets, and nonhousing net worth than renters do. These findings are particularly interesting because the period of study coincides with the housing crisis, periods of shrinking home values, and declining equity in the housing market as a whole.

The Effect of Marital Status on Home Ownership among Low-Income Households

This research examines whether married low-income renters are more likely to become home owners than comparable single, low-income renters. To do so, it employs data from the Community Advantage Panel Study and discrete-time survival analysis with propensity-score matching. Results suggest that married couples buy homes at higher rates, and buy them more quickly, than do their unmarried counterparts. Estimates in models that use propensity-score matching are robust to the control of selection bias between the married and the unmarried groups. The findings suggest that efforts to encourage marriage among low-income couples may be associated with subsequent economic mobility through home ownership.

Treatment Effects of a Relationship-Strengthening Intervention for Economically Disadvantaged New Parents

Objective: The purpose of the present study was to evaluate the treatment effects of a relationship skills and family strengthening intervention for n = 726 high-risk, disadvantaged new parents. Method: Hierarchical linear modeling and regression models were used to assess intervention treatment effects. These findings were subsequently verified through two sensitivity analyses using propensity score analysis and growth curve modeling. Results: Analyses indicated 6 of 10 beneficial treatment effects were statistically significant, including relationship satisfaction, relationship quality, communication, conflict resolution, arguing, and emotional abuse. Most of these effects were verified in the more rigorous sensitivity analyses. Conclusion: Study findings suggest that this intervention is effective in helping disadvantaged couples improve relationship skills and strengthen family bonds.

Do Tax-Time Savings Deposits Reduce Hardship Among Low-Income Filers? A Propensity Score Analysis

Objective: A lack of emergency savings renders low-income households vulnerable to material hardships resulting from unexpected expenses or loss of income. Having emergency savings helps these households respond to unexpected events, maintain consumption, and avoid high-cost credit products. Because many low-income households receive sizable federal tax refunds, tax time is an opportunity for these households to allocate a portion of refunds to savings. We hypothesized that low-income tax filers who deposit at least part of their tax refunds into a savings account will experience less material and health care hardship compared to non-depositors. Method: Using data from a household financial survey of a large-scale tax-time savings initiative, we examined the effects of saving tax refunds on material and health care hardship outcomes 6 months after filing taxes among a sample of low-income filers (n = 7,537). We used propensity score analysis to adjust for self-selection bias. Results: Six months after filing taxes, depositors have statistically significant better outcomes than non-depositors for five of six hardship outcomes. Also, Black filers have statistically significant worse outcomes than White filers for half of hardship indicators. Conclusions: Findings affirm the importance of saving refunds at tax time as a way to lower the likelihood of experiencing various hardships. Findings concerning race suggest that Black households face greater hardship risks than White households, reflecting broader patterns of social inequality.