Groundbreaking Studies: Good Neighborhoods Help Low-Income Children Succeed

Two groundbreaking new studies (here and here) by Harvard economists Raj Chetty, Nathaniel Hendren, and Lawrence Katz show that children whose families move to better neighborhoods experience lower teenage birth rates, higher college attendance and marriage rates, and large earnings gains as adults, relative to children who remain in less advantageous neighborhoods. 

The studies, which the New York Times highlighted today, point to the benefits of providing housing vouchers that enable families to move to better neighborhoods.

These new findings lay to rest any doubt that neighborhoods strongly influence children’s long-term success, as we examined in our October report.  One of the new studies provides the first look at adult outcomes for children who were younger than 13 when their families entered the Moving to Opportunity Demonstration (MTO).  (MTO was an experimental study of poor families who used housing vouchers to relocate from public housing developments in extreme-poverty neighborhoods to lower-poverty neighborhoods.) 

Using IRS data, the Chetty study finds that young boys and girls in families that used a voucher to move to lower-poverty neighborhoods were significantly likelier to attend college and earned 31 percent more — nearly $3,500 a year — as young adults than their counterparts in the MTO control group, whose families did not receive an MTO voucher.  Girls in families that moved to lower-poverty neighborhoods were also less likely to be single parents as adults.

The second study tracked the outcomes of more than 5 million lower-income families who moved across county lines.  Consistent with the findings of their MTO analysis, the researchers found significantly more college attendance, less teenage pregnancy, and higher incomes for the children in families who moved to better areas.  The longer the children lived in better areas, the stronger the positive effect grew. 

These findings reinforce the large body of evidence supporting the conclusion that neighborhoods influence children’s health, school achievement, and long-term success and well-being.  Research led by Robert Sampson and Patrick Sharkey (here, here, and here), for instance, suggests that growing up in extreme-poverty neighborhoods — and, in particular, in neighborhoods where violent crime is more common — can impair children’s cognitive development and school performance.  Growing research on toxic stress may help explain how these neighborhood conditions limit children’s development and long-term well-being.

Other research highlights the potential benefits for children of moving to better neighborhoods.  A study by Heather Schwartz found that children who moved to low-poverty neighborhoods and attended low-poverty schools made large gains in reading and math scores over a seven-year period, relative to similar students growing up in higher-poverty neighborhoods and schools.

As Chetty and his colleagues note, these findings have important implications for housing policy.  Specifically, they imply that providing families with children — particularly those with younger children living in distressed neighborhoods of extreme poverty — rental vouchers to move to lower-poverty neighborhoods can reduce the intergenerational persistence of poverty.  (Investing in effective strategies to improve distressed neighborhoods also is important.)

Moreover, while the studies underscore the positive difference that vouchers make for many families, the program could deliver even better results for hundreds of thousands of children — with little or no increased cost, if policymakers adopted a series of recommendations for voucher program reforms to better enable families to use vouchers to move to lower-poverty neighborhoods.