Creating Moves to Opportunity: Experimental Evidence on Barriers to Neighborhood Choice

98 Pages Posted: 20 Aug 2019

See all articles by Peter Bergman

Peter Bergman

Columbia University

Raj Chetty

Harvard University

Stefanie DeLuca

Johns Hopkins University

Nathaniel Hendren

Harvard University - Department of Economics

Lawrence F. Katz

Harvard University - Department of Economics; National Bureau of Economic Research (NBER)

Christopher Palmer

MIT Sloan; National Bureau of Economic Research (NBER)

Date Written: August 2019

Abstract

Low-income families in the United States tend to live in neighborhoods that offer limited opportunities for upward income mobility. One potential explanation for this pattern is that families prefer such neighborhoods for other reasons, such as affordability or proximity to family and jobs. An alternative explanation is that they do not move to high-opportunity areas because of barriers that prevent them from making such moves. We test between these two explanations using a randomized controlled trial with housing voucher recipients in Seattle and King County. We provided services to reduce barriers to moving to high-upward-mobility neighborhoods: customized search assistance, landlord engagement, and short-term financial assistance. Unlike many previous housing mobility programs, families using vouchers were not required to move to a high-opportunity neighborhood to receive a voucher. The intervention increased the fraction of families who moved to high-upward-mobility areas from 15% in the control group to 53% in the treatment group. Families induced to move to higher opportunity areas by the treatment do not make sacrifices on other aspects of neighborhood quality, tend to stay in their new neighborhoods when their leases come up for renewal, and report higher levels of neighborhood satisfaction after moving. These findings imply that most low-income families do not have a strong preference to stay in low-opportunity areas; instead, barriers in the housing search process are a central driver of residential segregation by income. Interviews with families reveal that the capacity to address each family's needs in a specific manner — from emotional support to brokering with landlords to customized financial assistance — was critical to the program's success. Using quasi-experimental analyses and comparisons to other studies, we show that more standardized policies — increasing voucher payment standards in high-opportunity areas or informational interventions — have much smaller impacts. We conclude that redesigning affordable housing policies to provide customized assistance in housing search could reduce residential segregation and increase upward mobility substantially.

Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Suggested Citation

Bergman, Peter and Chetty, Raj and DeLuca, Stefanie and Hendren, Nathaniel and Katz, Lawrence F. and Palmer, Christopher, Creating Moves to Opportunity: Experimental Evidence on Barriers to Neighborhood Choice (August 2019). NBER Working Paper No. w26164, Available at SSRN: https://ssrn.com/abstract=3439174

Peter Bergman (Contact Author)

Columbia University ( email )

Raj Chetty

Harvard University ( email )

1875 Cambridge Street
Cambridge, MA 02138
United States

Stefanie DeLuca

Johns Hopkins University ( email )

Baltimore, MD 20036-1984
United States

Nathaniel Hendren

Harvard University - Department of Economics ( email )

Littauer Center
Cambridge, MA 02138
United States

Lawrence F. Katz

Harvard University - Department of Economics ( email )

Littauer Center
Room 215
Cambridge, MA 02138
United States
617-495-5148 (Phone)
617-868-2742 (Fax)

HOME PAGE: http://www.economics.harvard.edu/faculty/katz/katz

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Christopher Palmer

MIT Sloan ( email )

77 Massachusetts Avenue
Cambridge, MA 02139-4307
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
13
Abstract Views
170
PlumX Metrics