The voices of Urban Institute's researchers and staff
June 5, 2015

New evidence should drive policies on neighborhoods and economic opportunity

June 5, 2015


Raj Chetty has been shaking up the conversation about economic opportunity in America. He’s using creative statistical methods to analyze millions of individual tax returns to track patterns of upward mobility from birth to adulthood. Chetty’s latest studies find that place really matters: where kids grow up has a big impact on what they earn as adults.

This new evidence makes a huge contribution to the body of research evidence about place and opportunity. We know that the connections between where people live and how they fare in life are complicated and that the causal arrows go both ways. But the research case is strong that living in a deeply poor, distressed, and isolated neighborhood undermines people’s well-being and long-term life chances, possibly even across generations.

And we’re now starting to see more and more compelling evidence that a change in neighborhood environment can yield improvements in life outcomes, especially if the change happens early in life and is sustained over time.

What’s the right policy response?

For far too long, scholars and policymakers have been bickering over the false choice of people vs place: Should we deliver assistance—like the earned income tax credit or food stamps—that helps all poor families, regardless of where they live? Or should we transform the distressed places where many poor people are clustered?

I reject this choice. It seems painfully obvious to me that—if we care about boosting economic mobility, especially for kids starting out at the bottom—we have to do both. Efforts to expand employment opportunities, boost wages, strengthen work supports, and bolster the social safety net are all necessary, but they are insufficient for families living in severely distressed neighborhood environments. 

That doesn’t mean I’m a proponent of interventions that focus myopically within the boundaries of distressed neighborhoods, interventions that have historically been described as place-based. Instead, I argue for what I call place-conscious strategies. By that I mean strategies that help people by explicitly addressing the neighborhood conditions most damaging to their well-being and to children's healthy development. 

This involves four quite different lines of work. 

  1. Investing in the most urgent needs of poor neighborhoods (with reducing exposure to violence at the top of this list).
  2. Breaking the link between where a family lives and its ability to gain access to critical opportunities (particularly good schools and jobs).
  3. Eliminating the barriers that block poor families, especially families of color, from finding affordable places to live in neighborhoods that already offer lots of opportunity (like exclusionary zoning and housing discrimination).
  4. Using federal housing subsidies (including housing vouchers) to help poor families move from distressed neighborhoods to safe neighborhoods with good public schools.

To be very explicit, I see housing mobility assistance, school choice, and neighborhood revitalization as complementary place-conscious strategies, not as competing ideologies.

Racial inequality and injustice

Neighborhoods of concentrated poverty and distress aren’t the products of “natural” or “normal” housing market operations or unconstrained choices. They are the consequence of decades of discriminatory public policies at federal, state, and local levels and discriminatory practices by private-market institutions.

Today, high-poverty, severely distressed neighborhoods are almost all predominantly black and/or Hispanic. Poor whites are much more dispersed geographically, scattered throughout non-poor neighborhoods. In fact, of the roughly 4 million poor children growing up in high-poverty urban neighborhoods today, almost 90 percent are children of color.

Over many decades, public policies built segregated neighborhoods of poverty and distress by simultaneously excluding poor families, especially families of color, from neighborhoods of opportunity and starving poor, minority neighborhoods of essential investments.

Reversing that legacy requires that today’s public policies tackle both the disinvestment and distress plaguing poor neighborhoods and the barriers that exclude low-income people from neighborhoods of opportunity.

That may sound like a pretty daunting policy prescription. But I think we actually know a lot about the tools necessary to implement it, and we’re continuously refining those tools as we learn more about what works and what doesn’t. 

Photo by Tamir Kalifa/ AP


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