May 12, 2015

May 12, 2015 | Commentary on Economy, Housing

When Moving to a Better Neighborhood Is Harmful

Would moving from a rough public-housing project in Baltimore to a middle-class neighborhood in the suburbs help teenagers? One would think so. After all, the projects are rife with unemployment, violence and drug abuse, and are poorly served by city schools and police. And research generally confirms that growing up in an average neighborhood is much better for poor children than growing up in one where everyone else is also poor.

However, a new study of a 1990s policy experiment, which I reviewed elsewhere, shows that moving from the projects to a better neighborhood hurt teenagers. Despite the good intentions of the policy, there are adults today who are unemployed or earning less than they would have been if they hadn’t left the projects because of a housing voucher in 1995.

The Moving to Opportunity program offered a random group of families in five cities, including Baltimore, a voucher to subsidize rent, but only if they moved to a neighborhood with low poverty. About half the families took the offer.

The study finds that young children benefited from the move. The younger they were, and thus the longer they lived in the new environment, the more it helped their adult outcomes. On the other hand, other studies found no gains in academic achievement for the same children, and the moves did not help adults’ health or incomes.

So why were teens worse off after moving? The study’s authors hypothesize that there is a significant disruption cost to moving large enough to offset five years of living in the better neighborhood.

This might be evidence that social networks–even in very depressed locations–are more valuable than most people realize. It might be that the teens did not fit in well in their new neighborhoods and schools. Or, it might be merely a statistical error, due to selection bias or the peculiarities of this particular experiment.

Regardless of the reason for the harm to teens, the study should remind policy makers that well-intentioned policies have the capacity to harm as well as to help.

 - Salim Furth is a research fellow in macroeconomics at the Heritage Foundation’s Center for Data Analysis.

About the Author

Salim Furth, Ph.D. Research Fellow, Macroeconomics
Center for Data Analysis

Related Issues: Economy, Housing

Originally appeared in The Wall Street Journal