The Effects of Exposure to Better Neighborhoods on Children: New Evidence from the Moving to Opportunity Experiment

NBER Working Paper No. 21156

Issued in May 2015, Revised in September 2015

NBER Program(s):Children, Economics of Education, Labor Studies, Public Economics



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.

Acknowledgments

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Document Object Identifier (DOI): 10.3386/w21156

Published: Raj Chetty & Nathaniel Hendren & Lawrence F. Katz, 2016. "The Effects of Exposure to Better Neighborhoods on Children: New Evidence from the Moving to Opportunity Experiment," American Economic Review, American Economic Association, vol. 106(4), pages 855-902, April. citation courtesy of

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