Earlier this week, Scioto Analysis released a cost-benefit analysis that looked at the impacts the Moving To Opportunity program would have if expanded in Ohio. In this study, we found that the benefits of expanding this program would be about three times the cost, with most of the benefit accruing to program participants who would be expected to have higher future earnings.
The way Moving to Opportunity works is that low-income families are given housing assistance that is conditional on them finding a place to live in a low-poverty neighborhood. In the original experiment conducted by economists from MIT and Harvard, program participants were also given counseling to help them with their transition.
The findings from the original study and our own are pretty dramatic. Children who grow up in wealthier neighborhoods tend to have better outcomes, even if they do not themselves come from a wealthy family.
In health policy research, this concept is referred to as the social determinants of health. In short, they are the environmental conditions that impact health outcomes. The idea is that two physically identical people may have different outcomes if they have different social characteristics (say one is more educated than the other). With Moving to Opportunity, we see how these environmental characteristics can impact a wide range of other outcomes as well.
Like all public policies, Moving to Opportunity is not a silver bullet. The design of the program is important in determining its success. As the original study notes, positive effects are limited to families with children under the age of 13. Adolescents who moved as part of the program ended up with slightly worse outcomes compared to the control group. The researchers speculate that this may be because these children were older, they received less exposure to the environment with better outcomes, and the negative disruption associated with moving ended up being a stronger effect.
This is an important caveat because it highlights the role that environment plays in early development. This is why policies that target very young children such as a Child Tax Credit can have such a massive return on investment.
I think the biggest takeaway I have from this study is that economic segregation is a costly part of our society. We know that poverty is bad and impacts everyone in our society, but this is a reminder that we amplify that problem when high-income households try to isolate themselves from low-income households.
This is a case of short-term vs. long-term thinking. A single family home might be less valuable if it is across the street from an affordable housing development, but in the long-run, having single-family homes next to those apartments might lead to there being less poverty and crime for everyone.
Overall, the Moving to Opportunity program provides a compelling example of how addressing economic segregation can create significant social benefits. While not a perfect solution, its impact on young children is clear. Research keeps showing us time and time again that investments made to help families with young children get off to a strong start are worth it.