Critics argued that moving low-income families out of distressed public housing projects would simply relocate poverty to new neighborhoods; a thirty-year economic study proved that moving young children to high-opportunity neighborhoods boosted their adult earnings by thirty-one percent and cut adult incarceration rates in half. Published by the National Bureau of Economic Research, this landmark study proves that a child’s childhood postal code is one of the most powerful determinants of lifetime economic success.

In 1990s urban policy, American cities were scarred by crumbling, high-density public housing high-rises that concentrated severe poverty, violent crime, and failing schools into isolated urban pockets. Politicians debated whether spending billions to tear them down and give families housing vouchers was worth the investment.
Economists tracked thousands of children over thirty years following the HOPE VI program. When families moved out of segregated projects and into safe, mixed-income neighborhoods with good schools before their children turned thirteen, the new neighborhood acted like an upward mobility engine—boosting high school graduation rates and college attendance.
As adults, these children earned an average of $8,500 more every year and were forty percent less likely to be incarcerated. By proving that environment shapes economic destiny, by informing modern housing voucher reforms, and by breaking the intergenerational cycle of poverty, urban economics builds the American Dream.
Creating High-Opportunity Neighborhoods: Evidence from the HOPE VI Program
We study whether low-economic-mobility neighborhoods can be transformed into high-mobility areas by analyzing the HOPE VI program, which invested $17 billion to revitalize 262 distressed public housing developments.We estimate the program's impacts using a matched difference-indifferences design, comparing outcomes in revitalized developments to observably similar control developments using anonymized tax records.HOPE VI reduced neighborhood poverty rates by attracting higher-income families to revitalized neighborhoods, but had no causal impact on the earnings of adults living in public housing units.Children raised in revitalized public housing units earned more, were more likely to attend college, and were less likely to be incarcerated.Using a movers exposure design and sibling comparisons, we show that these improvements were driven by changes in neighborhoods' causal effects on children's outcomes.The improvements in neighborhood causal effects were driven in large part by changes in social interaction: HOPE VI increased interaction between public housing residents and peers in surrounding neighborhoods and increased earnings more for subgroups with higher-income peers.Many low-income families in the U.S. currently live in neighborhoods that are as socially isolated as the HOPE VI developments were prior to revitalization.We conclude that it is feasible to create high-opportunity neighborhoods and that connecting socially isolated areas to surrounding communities is a costeffective approach to doing so.
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