Moving to the American dream? (update)

Key takeaways

The original Moving to Opportunity experiment revealed complexities about housing's impact on economic mobility—what was initially deemed a failure has evolved into a more nuanced understanding of housing policy.
Younger children benefit significantly from moving to higher-opportunity neighborhoods, with long-term gains in earnings and educational achievements.
Policy changes are being implemented based on recent research insights, focusing on the importance of community choice and support in housing decisions.
Social capital plays a crucial role in determining economic outcomes, highlighting the need for community engagement and interconnectedness to reduce economic disparities.

Summary

The American Dream Experiment

In the 1990s, the federal government initiated a groundbreaking experiment aiming to test if housing policy could serve as a mechanism for upward mobility. The plan involved giving vouchers to low-income families to move from high-poverty neighborhoods to low-poverty areas. Initially, expectations were high that this address change would lead to significant improvements in jobs, earnings, and education. However, the results of this experiment turned out to be unexpected, leading researchers to reassess the implications of housing policy on economic mobility.

Research Evolution and Findings

Years after the initial study, new researchers, including Nathan Hendren and Raj Chetty, revisited the data from the HUD experiment. They discovered a crucial oversight: the age of children when moving significantly impacted long-term outcomes. Younger children who moved earlier had better chances of achieving upward mobility compared to older children. This new insight suggested that housing did indeed have the potential to create opportunities, contradicting the initial findings and prompting a reconsideration of housing policies to better support the economically disadvantaged.

Policy Reboot and Future Implications

The findings led to a revival of interest in housing policy as a vehicle for improving economic outcomes. The researchers proposed a reboot of the original Moving to Opportunity program, now emphasizing that families should have the freedom to choose where they move, empowering them with resources to make transitions smoother. Initial trials in Seattle proved successful, leading to new legislation in Congress to fund similar initiatives nationwide. This marks a significant shift in the approach to housing and economic mobility.

Social Capital and Community Impact

Recent research indicates that social capital—the interactions and connections between low and high-income individuals—is a strong predictor of economic mobility. The Opportunity Insights Team's latest studies show that children growing up in communities with diverse socioeconomic backgrounds benefit the most from upward mobility. This ongoing research suggests that enhancing community connections and resources is key to building more equitable opportunities, particularly for those in lower-income brackets.

Show notes

Back in the 90s, the federal government ran a bold experiment, giving people vouchers to move out of high-poverty neighborhoods into low-poverty ones. They wanted to test if housing policy could be hope – whether an address change alone could improve jobs, earnings and education.

The answer to that seems obvious. But it did not at all turn out as they expected.

Years later, when new researchers went back to the data on this experiment, they stumbled on something big. Something that is changing housing policy across the country today.

Today's episode was originally hosted by Karen Duffin, produced by Aviva DeKornfeld, and edited by Bryant Urstadt. The update was hosted by Amanda Aronczyk, produced by Sean Saldana and fact checked by Sierra Juarez. Our supervising executive producer is Alex Goldmark.

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