Many low-income families aspire to relocate to safer, quieter neighbourhoods with better schools, but they seldom need to make such moves. A high-profile experiment led by MIT economists reveals that with just a modest amount of logistical support, the likelihood of these families moving to areas with better economic opportunities significantly increases. The study, conducted in the Seattle area, found that the number of families using housing vouchers to move jumped from 15 per cent to 53 per cent with the aid of additional information, financial support, and, crucially, the assistance of a “navigator” who helped overcome logistical hurdles.

The research aimed to understand the drivers behind residential segregation, questioning whether it was due to personal preferences or if logistical constraints hindered mobility. “Just pairing people with [navigators] broke down search barriers and created dramatic changes in where they chose to live,” noted Nathaniel Hendren, an MIT economist and co-author of the study. The results were compelling enough for the U.S. Congress to allocate $25 million twice, funding replications of the experiment in eight other U.S. cities.

This experiment builds on insights from the 2018 “Opportunity Atlas” and a 1990s federal initiative, both of which explored the geography of economic mobility but with mixed outcomes. The current study, Creating Moves to Opportunity (CMTO), not only provided housing vouchers but also short-term financial help, more comprehensive information, and navigator support. This comprehensive bundle significantly enhanced the effectiveness of the assistance, demonstrating that the main impact came from the comprehensive support, especially from navigators.

The finalised study, published as “Creating Moves to Opportunity: Experimental Evidence on Barriers to Neighborhood Choice” in the American Economic Review, underscores the importance of tailored support in overcoming diverse familial barriers, from lease terms to school selection. The researchers found that emotional support from navigators was particularly valued, highlighting the significant impact of this study on understanding the stressful nature of moving.

With the success of the Seattle experiment, there is now keen interest in seeing if these outcomes can be generalised to other cities. Funded replications in cities like Cleveland, Los Angeles, and New York City are underway to test the program’s effectiveness across different urban landscapes and societal contexts. This nationwide testing could confirm whether the Seattle model can serve as a blueprint for reducing residential segregation and enhancing economic mobility.

The Seattle study represents a significant step forward in understanding and combating the systemic issues that perpetuate intergenerational poverty and residential segregation. By providing financial assistance, information, and personalised navigational support, the experiment has demonstrated a potential pathway to empowering low-income families to move toward better opportunities, with implications for policy and practice across the United States.

More information: Peter Bergman et al, Creating Moves to Opportunity: Experimental Evidence on Barriers to Neighborhood Choice, American Economic Review. DOI: 10.1257/aer.20200407

Journal information: American Economic Review Provided by Massachusetts Institute of Technology