Neighborhood effects on the long-term well-being of low-income adults

Abstract

Nearly 9 million Americans live in extreme-poverty neighborhoods, places that also tend to be racially segregated and dangerous. Yet, the effects on the well-being of residents of moving out of such communities into less distressed areas remain uncertain. Using data from Moving to Opportunity, a unique randomized housing mobility experiment, we found that moving from a high-poverty to lower-poverty neighborhood leads to long-term (10- to 15-year) improvements in adult physical and mental health and subjective well-being, despite not affecting economic self-sufficiency. A 1-standard deviation decline in neighborhood poverty (13 percentage points) increases subjective well-being by an amount equal to the gap in subjective well-being between people whose annual incomes differ by $13,000--a large amount given that the average control group income is $20,000. Subjective well-being is more strongly affected by changes in neighborhood economic disadvantage than racial segregation, which is important because racial segregation has been declining since 1970, but income segregation has been increasing.

Fig. 1

Impact on each outcome of assignment to the MTO treatment (voucher) groups for adults interviewed in long-term survey. The squares represent the intent-to-treat (ITT) estimate for the effect of being assigned to MTO treatment (pooling low-poverty and traditional voucher groups) rather than control, for the outcomes listed on the x-axis: economic self-sufficiency, physical health, mental health, and subjective well-being (see Table 2 note, and supplemental materials sections 1, 4, and 5). The box whiskers represent the 95th percent confidence interval around the estimates.

Fig. 2

Instrumental variable estimation of the relationship between subjective well-being (SWB) and average (duration-weighted) tract poverty rate (panel A), tract share minority (panel B), tract poverty controlling for minority share (panel C), and tract minority share controlling for tract poverty (panel D). The y-axis is a 3-point happiness scale (1=not too happy, 2=pretty happy, 3=very happy) expressed in standard deviation units relative to the control group. Share poor is the fraction of census tract residents living below the poverty threshold. Share minority is the fraction of census tract residents who are members of racial or ethnic minority groups. Tract shares are linearly interpolated from the 1990 and 2000 decennial census and 2005–09 American Community Survey and are weighted by the time respondents lived at each of their addresses from random assignment through May 2008. Share poor and minority are z-scores, standardized by the control group mean and standard deviation. The points represent the site (Bal = Baltimore, Bos = Boston, Chi = Chicago, LA = Los Angeles, NY = New York City) and treatment group (LPV = low-poverty voucher, TRV = traditional voucher, C = control group). The slope of the line is equivalent to a 2SLS estimate of the relationship between subjective well-being and the mediator shown in each panel, using interactions of indicators for MTO treatment group assignment and demonstration site as instruments for the mediator (controlling for site indicator main effects).