Moving, But to Opportunity? Examining Neighborhood Relocation

The widening income gap in American society has left many Americans facing the difficult odds imposed by extreme poverty. With limited access to education, employment opportunity, and social services–along with higher rates of exposure to crime and violence–residents of high-poverty neighborhoods often experience poor health and economic outcomes. An ongoing debate has questioned the role of racial and income segregation in shaping these outcomes. But does moving to a less distressed area really increase residents’ health, wealth, and happiness?

A recent article in the journal Science examines the role that the neighborhood itself plays in these outcomes – and what that could mean for anti-poverty policy. In “Neighborhood Effects on the Long-Term Well-Being of Low-Income Adults,” a group of authors suggests, while relocating might not improve traditional outcomes like earnings, a new neighborhood can have a lasting impact on people’s overall well-being.

The article used data from the Moving to Opportunity (MTO) program, a mid-1990s experimental initiative of the U.S. Department of Housing and Urban Development (HUD). Operating in five major U.S. cities, the program randomly assigned housing vouchers to families living in public housing in neighborhoods with extreme poverty. Some families received vouchers requiring them to live in neighborhoods with lower poverty rates, some received vouchers allowing them to live anywhere, and some received nothing at all. The study followed all three groups and compared how these groups fared in terms of their well-being and financial stability over a period of ten to fifteen years.

Families in each of the groups that received vouchers were more likely to move to less impoverished areas than those who received no vouchers—indicating that families in the study were eager to relocate and were able to use the vouchers to assist them in doing so. Like previous studies of the program, the authors found that relocating to less-distressed neighborhoods may positively affect physical health and was associated with improved mental health as well. Residents with voucher support, however, experienced no significant shift in their economic self-sufficiency—indicating that the program failed to achieve one of its major objectives.

Despite this, the study revealed that relocation has another positive and previously unexplored effect on the lives of people from high-poverty neighborhoods. Voucher-supported residents reported significant improvements in their well-being compared to those who did not receive voucher support. The authors estimate that this change in overall well-being—measured by residents’ self-reported happiness—is comparable to a $13,000 increase in annual income. Although residents’ income did not change with their surroundings, their quality of life improved as if it did.

Importantly, the authors found that income segregation and racial segregation seemed to have different impacts on residents. Moving to an area with less income segregation had a larger positive impact on participants’ well-being than moving to an area with less racial segregation. This finding has substantial implications for policymakers and anti-poverty advocates, as addressing income and racial segregation require different tools of implementation. And as recent data depict trends of decreasing racial segregation alongside increasing income segregation in the United States, the study’s findings could be crucial for pointing policymakers in the right direction.

Feature Photo: cc/Paolo Margari