Tanvi Misra is a staff writer for CityLab covering immigrant communities, housing, economic inequality, and culture. She also authors Navigator, a weekly newsletter for urban explorers (subscribe here). Her work also appears in The Atlantic, NPR, and BBC.
Relocating to a lower-poverty neighborhood has significant, long-term benefits for kids, regardless of their age.
In the 1950s, several high-rise complexes were constructed in Chicago with the seemingly noble aim of creating affordable housing for the city’s poor. But these “projects,” it soon became clear, were more like warehouses than homes, and continued the long tradition of segregating and isolating poor, black Chicagoans in the worst parts of town. By the 1990s, bad design, neglect, and mismanagement had made some of these buildings unlivable. In the Robert Taylor Homes on the South Side, for example, pipes burst in 1999, causing flooding and shutting down the heat in several buildings. In the 1990s, these structural issues (and lawsuits challenging this housing strategy as racist) forced then-Mayor Richard M. Daley to tear down many of the structures that had gone up under the watch of his father and predecessor, Mayor Richard J. Daley.
Being kicked out of their homes, imperfect as they were, undoubtedly shook up the lives of these families. But the households that moved to slightly better neighborhoods with the help of Section 8 housing vouchers saw striking longterm economic benefits for their children.
That’s what Eric Chyn, an economist at the University of Michigan, finds in his new research paper. Chyn analyzed the adult economic profiles of more than 5,000 kids in public housing who were between 7 and 18 years old at the time of demolitions in 1995 through 1998. The ones whose families were forced to move ended up with a 16 percent higher annual income and earned around $45,000 more over their lifetime compared to their peers who stayed behind. The relocated kids were also 9 percent more likely to be employed.*
These striking results add to a body of evidence suggesting that the positive impact of moving people to better neighborhoods has been grossly underestimated. Chyn’s paper is “arguing for continued support and expansion of voucher programs,” he tells CityLab.
Kids of all ages benefited
A lot of existing research on residential mobility draws from the federal government’s Moving to Opportunity (MTO) experiment in the 1990s, in which randomly selected participating families were given vouchers that subsidized market-rate housing in richer neighborhoods. Perhaps the most significant positive finding on MTO’s impact came from economist Raj Chetty and his colleagues. His 2015 research found that kids under age 13 whose families had won the voucher lottery in MTO ended up earning higher wages as adults than the kids of families that didn’t win.
Chyn’s findings go a step further: They suggest that relocating to a better neighborhood would yield significant benefits for kids of all ages.
A “unique, natural experiment”
The families who lived in buildings slotted for demolition during the time period Chyn examined were given a choice: They could use a Section 8 housing voucher and relocate to a different neighborhood, or they could transfer to another public housing building. According to Chyn’s data, only 11 percent took the latter option.
Chyn tracked these voucher beneficiaries using state government data, and found that they moved to neighborhoods with about 20 percent less poverty within three years of leaving public housing. The demolitions, therefore, created the perfect conditions for Chyn to test the impact of moving to a lower-poverty neighborhood on economic mobility. Economist Justin Wolfers, one Chyn’s thesis advisors, explains in the The New York Times:
These demolitions were effectively a lottery, because they led to the dislocation of some families—those whose buildings were demolished—but not those whose buildings were left standing. Thus those families that left did so for essentially random reasons.
Compare that to the MTO experiment, where families came forward and signed up for the lottery, in part because they were particularly motivated to escape their circumstances. (Interviews with parents of MTO participants have shown, for example, that they were extremely concerned what exposure to their high-poverty, high-crime neighborhoods would do to their kids.) It’s possible then that MTO participants self-selected, with certain characteristics that set them apart from those who hadn’t signed up, leading to understated positive results.
Chyn’s experiment sidestepped that problem because the public housing demolitions essentially forced families to move, whether they were motivated or not. That’s why his results are particularly salient, he argues.
"This is a particularly unique natural experiment,” Chyn tells CityLab. “To really know the true effect of relocating these people, we need to have a way of knowing that people who moved and people who didn’t move are comparable.”
Where are the people who would most benefit from vouchers?
In a second part of his paper, Chyn analyzed adult outcomes of kids who were beneficiaries of a separate housing voucher lottery in Chicago, which was conducted after the demolitions. As with the MTO, this voucher lottery attracted families that were “sufficiently motivated to sign up for this program,” Chyn writes in the paper.
He found that the economic benefits for the children of the Chicago lottery recipients was statistically insignificant—a sharp contrast to his findings from the natural experiment created by the public housing demolitions. There could be some statistical reasons for this discrepancy, but this is how Chyn explains it in his paper:
Comparing the lottery and demolition results suggests that children who move through voluntary mobility programs have lower gains to relocation.
To be clear, Chyn isn’t saying that households that sign up for vouchers don’t stand to benefit from them; Chetty’s research and his own proves that they do. To the contrary, he’s saying that the groups that stand to benefit most from vouchers may not even be signing up for them—yet.
*Correction: A previous version of this article stated that children of families who used vouchers to move to better neighborhoods after the demolitions were 9 times more likely to be employed than the kids who stayed behind. They were actually 9 percent more likely to have a job.