I use shredded paper for my nesting boxes...I have a cross cut shredder for my documents. I fill the nesting boxes right up. I have found that it is easy to clean out of the nesting boxes when it is dirty, it seems to be comfortable for the chickens to sit on, it decomposes in my compost pile quickly, and it is an added measure of security...since after the papers are shredded, I don't think that ANYONE is going to go to my chicken coop to try to piece my documents back together to steal my information. I'm not sure if it is a recommended bedding, but I've been using it in my hen house for about five years. I do have straw on the ground for my ducks, only because they seem to make a mess of everything, the paper just turns to mush with the littlest bit of water...
It's very inexpensive...since most of it is junk mail and/or bills that are no longer needed...