In this discussion, Raj Chetty, Director of the Opportunity Insights Team at Harvard, delves into groundbreaking research on economic mobility. He reveals surprising results from a federal housing voucher experiment that aimed to improve outcomes for families moving to low-poverty neighborhoods. Despite expectations, initial impacts on education and earnings were minimal. Chetty highlights how relocating at a young age can significantly boost adult success, reshaping housing policy across the country. The conversation uncovers the complex dynamics between neighborhoods and the American Dream.
The Moving to Opportunity experiment aimed to improve low-income families' lives but ultimately revealed minimal economic benefits from relocating to lower-poverty neighborhoods.
Recent studies indicate that relocating children to higher opportunity neighborhoods before age 13 significantly enhances their long-term education and earnings outcomes, emphasizing the importance of timing in relocation efforts.
Deep dives
The Experiment of Moving to Opportunity
The podcast discusses a significant social experiment introduced by HUD aimed at improving the lives of low-income families through relocation to low-poverty neighborhoods. The Moving to Opportunity (MTO) initiative provided families with vouchers that required them to move away from high-poverty areas, attempting to explore whether changing their address would result in better economic outcomes. The research involved 4,600 families assigned to various groups, including a control group that remained in public housing and an experimental group mandated to relocate to neighborhoods with a poverty rate of 10% or less. Although the intention was to enhance educational and employment prospects through this move, the longitudinal study revealed minimal improvements in these areas, thus challenging common assumptions about the impact of neighborhood changes on upward mobility.
Shifting Perspectives Through New Data
After the disappointing findings from the MTO study, new research emerged utilizing tax records to evaluate the actual effects of moving on children's economic outcomes. This more recent work demonstrated a distinct pattern where children who moved to higher opportunity neighborhoods before the age of 13 showed marked improvements in their long-term earnings and education compared to older children. The implications were significant; younger children benefitted from relocating, while those who moved at an older age experienced detrimental effects. This shift in findings indicated that where one resides plays a crucial role in economic mobility, suggesting that the timing of relocation holds considerable weight in determining future opportunities.
Opportunities and Challenges Ahead
The podcast highlights the ongoing work of researchers to refine housing policy based on the findings from the new studies. There is now a renewed focus on aiding families in their transition to more affluent neighborhoods through support systems, such as housing counselors, which significantly increased successful relocations. New legislation has emerged backing these modified programs, emphasizing conscious efforts to foster economic mobility for disadvantaged individuals. However, despite generating more promising outcomes, challenges remain in scaling these initiatives and ensuring broader implementation to assist more families in realizing improved opportunities through better housing.
Back in the 90s, the federal government ran a bold experiment, giving people vouchers to move out of high-poverty neighborhoods into low-poverty ones. They wanted to test if housing policy could be hope – whether an address change alone could improve jobs, earnings and education.
The answer to that seems obvious. But it did not at all turn out as they expected.
Years later, when new researchers went back to the data on this experiment, they stumbled on something big. Something that is changing housing policy across the country today.
Today's episode was originally hosted by Karen Duffin, produced by Aviva DeKornfeld, and edited by Bryant Urstadt. The update was hosted by Amanda Aronczyk, produced by Sean Saldana and fact checked by Sierra Juarez. Our supervising executive producer is Alex Goldmark.