Moving Families Out Of Poor Neighborhoods Makes Them Happier

A blog about business and economics.
Sept. 21 2012 9:30 AM

Moving Families Out Of Poor Neighborhoods Makes Them Happier

Apparently at some point people got the idea that if you took poor families living in neighborhoods that were majority-poor and moved them to neighborhoods where only a third of residents are poor that this would lead to better labor market or education outcomes. The Moving to Opportunity program creates a unique properly randomized population sample whereby we can study this issue and the answer turns out to be that it doesn't make a difference on those metrics but it does make people happier.

The whole saga is written up for popular consumption by Sabrina Tavernise and seems like a bit of a cavalcade of sophisticated research proving the obvious:

Professor Wilson said it was not surprising that education levels did not change significantly because many of the children who moved remained in the same school districts. And Lawrence Katz, an economics professor at Harvard and one of the study authors, said that the preference for educated workers was so strong that changing neighborhoods did not do much to improve job options for the participants, who were mostly African-American women without college educations.
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In other words we're talking about really small moves in location. Adults aren't moving to different labor markets and kids aren't moving to different school districts, so naturally labor market and schooling outcomes don't change. But people are happier anyway:

Moving to a neighborhood that was less poor caused families that were making $20,000 a year to feel as happy as families making $33,000 a year, Professor Ludwig said.

It seems to me that probably the less-poor neighborhoods aren't just less-poor for no reason. They're probably actually better places to live, and thus somewhat more expensive, and thus less densely occupied with poor people. Moving families to a more expensive neighborhood has similar hedonic effects to giving them more money, because one thing people do when they get more money is move someplace better. So I'd read this as reenforcing the conclusion that the most successful anti-poverty program is giving poor people money and also as reenforcing the point that exclusionary zoning and inadequate provision of housing supply are major problems. In a few American cities—and some whole states like New Jersey and Connecticut—we basically use pockets of high crime and bad schools as an affordable housing policy, and living in a poor crime-ridden neighborhood turns out to be a huge bummer (shocking), which is why affluent people don't do it.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.