Moving to Opportunity in Boston: early results of a randomized mobility experiment

1. Moving to Opportunity in Boston: early results of a randomized mobility experiment Lawrence F. Katz; Jeffrey R. Kling & Jeffrey B. Liebman Presented by Paul Lewin

2. Reference • Katz, L., J.R. Kling, and J.B. Liebman. 2001. “Moving to Opportunity in Boston: Early Results of a Randomized Mobility Experiment.” Quarterly Journal of Economics 116(2): 607-654.

3. Contents • Background Information • The Research • Data & Method • Results & Conclusion

4. I. Background Information

5. A. Poverty • 1970-1990 % poor persons in metro areas increased. • Tracts w/ poverty rate +40% increased from 12% to 18% • Federal housing policies contribute to this trend. • Public housing development 1950s & 1960s • Poorest eligible households 1980s • Increase segregation by income & race

6. B. Neighborhoods effects • Current well-being & Future opportunities • Neighborhood characteristics: • School quality, safety from crime • Peers influence youth behavior • Also, youth outcomes could reflect family background

7. C. Moving to Opportunity (MTO) • Baltimore, Boston, Chicago, Los Angeles & New York • Since 1994 (study was done 1996-1998) • Eligible families: • Children • Reside in public housing or project-base Section 8 assisted housing • Census (1990) tracts with poverty rate +40%

8. C. Moving to Opportunity (MTO) • Programs groups (randomly assigned) • Experimental group • Restrictive housing voucher - $700/month • Only can be used in low poverty area -under 10 poverty rate • Counseling assistance -$1827/household • To help families search for an apartment • And adjust to a new neighborhood

9. C. Moving to Opportunity (MTO) • Section 8 Comparison group • Unrestricted housing voucher -$700/month • No counseling assistance • Control group • 4-6 m. to submit a house, which must pass an inspection

10. II. The Research

11. A. Researchers’ Interest • Comprehensive evaluation of impacts of the MTO • Impacts of neighborhood attributes on • Child human capital accumulation; • Adult economic outcomes; • Safety and adult mental health. • They have a long-run effects on child outcomes and family well-being

12. Children Human Capital Accumulation • Peer influence • Educational choices, crime, delinquent behaviors • Contagion effects (learning from peers) • Stigma effects (declining of negative signals) • Physical externalities (reduced chances to be arrested) • Adult influence • Human capital externalities: role models, enforcers public order • Community resource • Schools, recreational activities, labor market opportunities • Reduce child problem behavior • Increase perceived returns from education *

13. Adult Economic Outcomes • Moving to a suburban neighborhoods: • Increase access to employment opportunities • Low poverty areas: Supportive of work & lower welfare usage • Disrupt social support networks • Child care, job referrals, labor market information • The effect of moves become positive over time, but it is ambiguous in the short run

14. Safety and Adult Mental Health • Families moving out of high poverty public housing should experience: • Improved neighborhood safety • Improved housing conditions • Reduction in parental stress and anxiety • Positive effects offset by social isolation *

15. Data & Methods

16. A. The Data • Qualitative fieldwork • Surveys • MTO survey prior to enrollment • MTO-Boston Follow-up Survey • Administrative records • Massachusetts Department of Revenue’s Longitudinal Data Base • Welfare & employment impact

19. Eligible Families That Complete Application and Survey Random Assignment to one of Three Groups Experimental Treatment Group Section 8 Treatment Group Control Group Z=0 Z=1 Don’t Use Voucher Use Voucher Don’t Use Voucher Use Voucher Would Use Voucher Would not Use Voucher 1 2 3 4 C=1 5 6

20. Impact of being offered the opportunity to move with MTO Intent-to-Treat (ITT). B. Method Treatment-on-Treated (TOT) Average effect of the treatment on those who actually receive the treatment

21. III. Results & Conclusion

22. g • Difficult to find apartment • Transportation cost • Social isolation • Census tracts restriction more important than the counselor Experimental group were much more likely to live outside the city • Local areas in which treatment groups were living were different from the control • Section 8 had smaller differences with control group Experimental group shows increase in school average reading and math score

23. (1- 3.5 years after)

24. Children in both treatment groups exhibit fewer behavior problems. • Experimental group children have lower prevalence of injuries and asthma attack • Changes in neighborhoods induced by MTO have no effect in adult economy self-sufficiency • There are improvements in the perceived safety of treatment group • There are improvements in health status and mental health of household heads

25. Housing Policies • Housing vouchers improves the well-being • Benefits from moving are large for children • Vouchers generate positive intergenerational externalities • Unknown impact of MTO on families left behind • Vouchers are insufficient to overcome the labor market disadvantages of inner-city, single mothers

26. Questions Thank you