The children who moved when they were young enjoyed much greater economic success than similarly aged children who had not won the lottery. And the children who moved when they were older experienced no gains or perhaps worse outcomes, probably the result of a disruptive move, paired with few benefits from spending only a short time in a better neighborhood.These lotteries are a common public policy move when there are more people seeking a policy offering, such as a slot in an immersion school, than there are slots available. The housing situation is similar. I'll leave for another day the subtleties of allocating resources using something other than prices. Let's focus on the environmental effects.
The sharpest test comes from those who won an experimental housing voucher that could be used only if they moved to low-poverty areas. Here the findings are striking, as those who moved as a result of winning this voucher before their teens went on to earn 31 percent more than those who did not win the lottery. They are also more likely to attend college. Other families were awarded Section 8 housing vouchers, which subsidize renting a house or apartment. But because they did not require the winners to move to better parts of the city, people typically moved to neighborhoods that were better but perhaps by only half as much. As a result, the eventual income gains to the preteen children who won this the lottery were about half as large.A working economist writing a policy piece for an Excessively Earnest newspaper is unlikely to write, "look what happens when the neighborhood doesn't have the redeeming features of a trailer park and a hippie commune." But there it is.
The knock-on effects appear to be making a case for the bourgeois virtues.
The girls raised in better neighborhoods are also more likely to grow up to marry, and when they have children, are more likely to maintain a relationship with the father. They are also more likely to live in better neighborhoods as adults. This suggests that the next generation — the grandchildren of the winners of this lottery — are more likely to be raised by two parents, to enjoy higher family incomes and to spend their entire childhood in better neighborhoods. That is, the gains from this policy experiment are likely to persist over several generations.Mr Wolfers's summation: place matters. What goes on in those places, moreso.