Moving to opportunity

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<p>Romesh Vaitilingam interviews Lawrence Katz for Vox</p>
<p>January 2009</p>
<p>Transcription of an VoxEU audio interview [http://www.voxeu.org/index.php?q=node/3768]</p>
<p><strong>Romesh Vaitilingam</strong>: Welcome to Vox Talks, a series of audio interviews with leading economists from around the world. My name is Romesh Vaitilingam, and today's interview is with Professor Lawrence Katz from Harvard University. Larry and I met at the American Economic Association's annual meetings in San Francisco in January 2009, where we spoke about Moving to Opportunity, a housing project launched by the US government in the mid 1990s, which has made it possible to evaluate the importance of neighborhood effects. Larry began by describing the project.</p>
<p><strong>Professor Lawrence Katz</strong>: The project is known as the Moving to Opportunity project, which actually has an interesting policy history in the US. Many of you may remember that in 1992 there was a major riot in Los Angeles, known as the Rodney King Riot, which, for a short period, created a lot of salience in US political circles concerning problems of inner city neighborhoods and minority neighborhoods and, in late 1992, led to a sort of renewal/urban policy bill to deal with inner city problems. And one of the small planks of that bill was putting out some money for the US Department of Housing and Urban Development to try to look at innovative ways of improving the situation of inner city families.</p>
<p>And one of those ended up being in the Clinton administration, '93, a true random assignment demonstration project to provide opportunities for families living in the highest poverty public housing projects in the United States to get the opportunity to move to different neighborhoods, both to see whether such housing assistance was possible and effective, and actually to try to learn the answer to a very important old social science question, which is: how important are neighborhoods, per se, and peers, as opposed to family background.</p>
<p>And that's been a very difficult issue to study because we know kids' families in poor neighborhoods do worse than families in richer neighborhoods. Kids who grow up in poor neighborhoods do worse in school, are more likely to end up in jail, do less well in the labor market.</p>
<p>But of course, people aren't randomly assigned to poor neighborhoods. Their family backgrounds differ. Many difficult to measure factors. So Moving to Opportunity creates an opportunity to break that selection, by actually randomly assigning not actual neighborhoods people live in but incentives to live in different types of neighborhoods, by giving people who want to move out of poor neighborhoods opportunities to move, through housing vouchers.</p>
<p>And the two big questions one looked at is, one, could they actually move to different types of neighborhoods, and then, two, does it matter. We started his project in 1994, randomly allocating people in lotteries over the next three years in five cities: Boston, Baltimore, LA, Chicago, and New York City. And we've been tracking them since, trying to first look at how many people actually can move when given these types of vouchers, and then what does it do.</p>
<p>The first answer is yes. Almost half the people in our what we call experimental group, who got a voucher but could only use it to move to a low poverty area meaning an area with less than the national poverty rate in the US, a middle class neighborhood were able to move. And we've been tracking them and the control group since, done short run and intermediate term evaluations, and now we've done long run.</p>
<p>And the interesting answers we've learned so far is, one, most of these families wanted to move because of real fears of violence and gangs. These are all families with kids, typically single female headed families, concerned with getting their kids out of such environments. And on that measure, it's clearly a success, measures of criminal victimization of the families. Measures of happiness, tranquility, well being certainly go up.</p>
<p>And the key thing here is to compare all the people in the treatment group who got the voucher, whether they used them or not, to all the people in the control group, to get around the selection of who actually uses the voucher. And very substantial impacts on mental health of the mothers, on feelings of sort of tranquility and on safety.</p>
<p>The next question is does that actually translate into outcomes in the labor market for the adults. This goes back to old work on the spatial mismatch hypothesis: if you get out of the inner city, will you actually improve your labor market outcomes? And then, for the kids, what are the effects of schools, neighborhoods, and peers.</p>
<p>This is a long run evaluation, and for young kids, we still won't know the answers. But for the older kids, we had some very surprising, to us, results, which is very big gender gaps in the impacts. Girls, teenage girls, young women seem to take tremendous advantage of the new neighborhoods and flourish given the opportunity to move to higher income neighborhoods. They tend to integrate in the new neighborhoods over time. They're less likely to be involved in risky behavior. They're doing better in school. The same factor does not show up with the boys.</p>
<p><strong>Romesh</strong>: What do you think's going on there?</p>
<p><strong>Professor Katz</strong>: The boys seem to have a much tougher time adjusting to new neighborhoods. And in the short run, they seem to be doing OK, but over time, they seem to fall off the path, get involved more in trouble with the law, having trouble in school. We have a number of hypotheses. Some things we can definitely rule out. It's not, for example, that you move to a different type neighborhood if you have a teenage boy than a teenage girl, because, in fact, we have tons of siblings and the same pattern shows up when they're living in the exact same residence.</p>
<p>Some of it really is the differences, I think, the way middle class neighborhoods treat boys versus girls. I think the boys are much more threatening. They run into more problems with the law. I think a lot has to do with parental monitoring. The mothers continue to monitor the daughters heavily, even in the new neighborhoods. Many of the mothers feel incredible relief at having their boys out of the situation they were in before.</p>
<p>And one thing we clearly see as a mediating factor is much less involvement, with both mothers monitoring the boys less in the new neighborhoods, and they've moved farther away from their adult male role models. The girls all move with an adult, same sex role model. The boys move farther away. And there's also a lot of going back to the old neighborhood when things aren't problems for the boys.</p>
<p>And the one interesting thing in our five sites, Los Angeles, they physically move much longer. And that's the one site where the boys also seem to be doing well, and where they go back and hang out in the old neighborhood, they really seem to be getting back involved in the types of things.</p>
<p>We just think the things girls do when they're having trouble don't get them sanctioned the way boys acting out do. But that's a big question we are focusing on, and that shows up, certainly, in teenage and young adult males. And we have this both on self reports and administrative data on things like arrests and crime, as well as earnings.</p>
<p>All these people that we look at so far really had well defined peer groups in their old neighborhoods. They were already in school.</p>
<p>One of the very interesting questions we're in the field now looking at is: if you move the kids young enough, do you still get these gender differences? If a young male actually grows up their whole time in a new neighborhood, forms peers there, do you still have the same lack of assimilation? Or does that, starting earlier, someone like Jim Heckman would think, lead to very different outcomes?</p>
<p>We are now in the field, in 2009, and late this year, hopefully, we'll have data. It's actually very costly to track 5,000 families, 11,000 kids who were dispersed in a mobility project over 15 years. So tracking them down and then trying to make sure we don't have high attrition is a big challenge that we're working on now.</p>
<p><strong>Romesh</strong>: But the plan is to track these kids throughout their lives, really, ideally.</p>
<p><strong>Professor Katz</strong>: Yeah. Certainly, the original congressional authorization mandated a long term evaluation, 10 to 15 years after, and that's what we are doing now. Although the money from the federal government is only a small part. We had to raise a lot of money from private foundations to track the people. Our hope will be to be able to track them, certainly passively, using things like unemployment insurance, Social Security earnings records or welfare records and criminal justice records over time. That will require the cooperation of the federal government since, the minute we finish our analysis, we can't keep IDs on these people, clear confidentiality.</p>
<p>Our hope, we'll be able to go back in the future and track them later at life, at least passively. There is no actual, statutory requirement that they continue the evaluation beyond this current round, but we hope that we can convince the new administration that that would be an interesting thing to do.</p>
<p><strong>Romesh</strong>: Has the policy actually carried on through since the early Clinton years? Is it still in action, and have your positive results been taken as encouraging news to continue with it?</p>
<p><strong>Professor Katz</strong>: So the policy issues that come out of this, there's a general scientific question of how important are neighborhoods, and then there's a policy question of what would be the ways, if you think neighborhoods are important, to try to reduce concentration in high poverty neighborhoods. And policy makers have had very mixed reactions to this research. I didn't go into the adult results. The adult results basically show very little average effect. Moving people to better neighborhoods for adult women didn't change their economic performance very much. So some people have interpreted that as saying this is not a very valuable policy. The mixed effects of boys versus girls have also led, so people, relative to some expectations that you would transform lives immediately by changing their neighborhoods.</p>
<p>John Edwards, when he was running his campaign, actually argued in his plans for something that looked like a large scale Moving to Opportunity project of providing many more vouchers and help for people in inner cities to move to different types of neighborhoods. That's not really caught on, generally. I would take it as saying changing neighborhood environments is important, but there's much more that one has to do, having to do with things like early childhood education.</p>
<p>And I also think the challenges in dealing and this is a broader question and some other research I've been doing with Claudia Goldin looking at changing gender gaps in educational attainment in the US. And here you see a microcosm of broader trends, which is, today, almost 60 percent of college students in the US are women. And when you start looking at poor families and minority families, things like college graduation rates are almost two to one in favor of young women versus young men.</p>
<p>Young women are doing a much better job taking advantage of educational opportunity. The adjustment problems we see of young minority men and poor men here are coming up more generally. And thinking about ways, the interaction of the criminal and juvenile justice system with young men and, more generally, ways to make schools work better for them, I think this raises the salience that even substantial changes in neighborhood environments, we need to think a lot more.</p>
<p>And it also raises questions that simple models that just think of, well, everyone's influenced by the average behavior of their peers. Really, even when you move people to very different neighborhoods, they tend to find sub groups. We have lots of interesting hypotheses, tough to evaluate.</p>
<p>If, in your old neighborhood, you were sort of in the middle of being tough, in the middle of being academic, and you move to a new neighborhood and now you're sort of at the top end of being tough and at the bottom end of being academic, as most of these young boys were, you may start choosing your peers and your groups to accentuate the things where you sort of get higher status. Thinking about models of identity, who you're signaling, who you hang out with, as opposed to neighborhoods just being this exogenous thing that affects you, I think, are going to be very important here.</p>
<p>But the policy question of whether housing vouchers, in terms of the families' well being and safety, clearly, deconcentrating poverty looks like a good thing. Whether it's going to turn...Families, if you did nothing else, would that turn these into people who will end up with kids getting good, middle class jobs? It looks like a lot more is needed.</p>
<p><strong>Romesh</strong>: Larry Katz, thank you very much.</p>

Topics:  Poverty and income inequality

Tags:  relocation, wellbeing, labour market outcomes

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