moving to opportunity and neighborhood effects: some sociological background

orgtheory.net

The New York Times posted a big feature yesterday on a couple of new papers by Harvard economists Raj Chetty, Nathaniel Hendren, and Lawrence Katz. The papers, like much of Chetty’s other work, use deidentified individual-level tax data to get at factors affecting income over time. In this case, they are interested in getting at neighborhood effects—in one paper, county-level effects on intergenerational income change, and in the other, the effects of the Moving to Opportunity experiment, which in the 1990s provided housing vouchers through a lottery system, on the same.

The big findings are that moving to a better neighborhood improves children’s income as adults, with the effects being cumulative. The experimental MTO data shows that each additional year of residence in the new neighborhood contributes linearly to an increase in adult income. However, the effects of a move zero out around age 13, after which they may be…

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