Neighbourhood Effects and Child Development – Long-Term Results of a RCT

Adults and children in high-income areas fare better than those in low-income areas, as we pointed out in a recent post. What would happen if families from low-income areas moved to high-income areas? This was evaluated in a famous experiment called the “Moving to Opportunity Experiment”, conducted in the 1990s in the USA. Families were randomised to receive or not receive a voucher that enabled them to move from a low to a higher income neighbourhood. Intention-to-treat (ITT) analysis showed that the opportunity to move was associated with improved physical and mental health among adults, despite the fact that only about half of the families in the intervention group availed themselves of the voucher. There were no effects on earnings or employment of these adults, but what about the development of the children? A further cut of the data relating to children has now been published,[1] again using ITT principles, and children under 13 years old when they were randomised to receive the voucher had much better prospects than controls. They were more likely to go to college and experienced substantially higher incomes than control children. However, children who were older when they had an opportunity to move experienced slightly negative effects, consistent with findings by CLAHRC WM.[2] In the older children it is speculated that the effects of disruption outweighed the benefits of the new neighbourhood on average. Inward migration did not appear to have any negative consequences for the receiving communities. This is a fascinating social experiment, up there with the original ‘Head Start’ study of an intervention to support poor, single mothers.[3] What are the policy corollaries? The finding supports policies to prevent the poor concentrating in ghettoes like the banlieues around Paris and the stark segregation of middle class people in gated compounds increasingly seen in African cities. Such policies are further supported by evidence from our last blog showing that the health or poor people was enhanced, rather than undermined, by proximity to richer families.

— Richard Lilford, CLAHRC WM Director

Reference:

  1. Chetty R, Hendren N, Katz LF. The Effects of Exposure to Better Neighbourhoods on Children: New Evidence from the Moving to Opportunity Experiment. Am Econ Rev. 2016; 106(4): 855-902.
  2. Singh SP, Winsper C, Wolke D, Bryson A. School Mobility and Prospective Pathways to Psychotic-like Symptoms in Early Adolescence: A Prospective Birth Cohort Study. J Am Acad Child Adol Psychiatry. 2014; 53(5): 518-27.
  3. Currie J, & Thomas D. Does Head Start Make a Difference? Am Econ Rev. 1995; 85(3): 361-4.
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