Working Paper: NBER ID: w21156
Authors: Raj Chetty; Nathaniel Hendren; Lawrence F. Katz
Abstract: The Moving to Opportunity (MTO) experiment offered randomly selected families living in high- poverty housing projects housing vouchers to move to lower-poverty neighborhoods. We present new evidence on the impacts of MTO on children's long-term outcomes using administrative data from tax returns. We find that moving to a lower-poverty neighborhood significantly improves college attendance rates and earnings for children who were young (below age 13) when their families moved. These children also live in better neighborhoods themselves as adults and are less likely to become single parents. The treatment effects are substantial: children whose families take up an experimental voucher to move to a lower-poverty area when they are less than 13 years old have an annual income that is $3,477 (31%) higher on average relative to a mean of $11,270 in the control group in their mid-twenties. In contrast, the same moves have, if anything, negative long-term impacts on children who are more than 13 years old when their families move, perhaps because of the disruption effects of moving to a very different environment. The gains from moving fall with the age when children move, consistent with recent evidence that the duration of exposure to a better environment during childhood is a key determinant of an individual's long-term outcomes. The findings imply that offering vouchers to move to lower-poverty neighborhoods to families with young children who are living in high- poverty housing projects may reduce the intergenerational persistence of poverty and ultimately generate positive returns for taxpayers.
Keywords: Moving to Opportunity; neighborhood effects; child outcomes; housing vouchers
JEL Codes: H53; I32; I38; R38
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Duration of exposure to lower-poverty neighborhoods (I32) | More significant benefits (D61) |
| Moving to lower-poverty neighborhoods before age 13 (R23) | Significant improvements in economic outcomes (O57) |
| Moving to lower-poverty neighborhoods before age 13 (R23) | Increase in college attendance rates (I23) |
| Moving to lower-poverty neighborhoods before age 13 (R23) | Less likely to become single parents (J12) |
| Moving to lower-poverty neighborhoods after age 13 (R23) | Negative or statistically insignificant effects (F69) |