Moving to the American dream? (update)
23:59 Share

This message comes from ship hub. The holiday start earlier every year, so get your e commerce logistics s in shipshape now with ship bub bel, fulfill orders across all the places you sell. Get a free quote at S H I P B O B dot com ship bob.

Before we start, we want to hear your questions. Now that the election is over and there will be a second trump presidency, we want to know, what would you like us to cover? Do you have questions about tariff s or immigration or presidential control of the federal reserve?

You can email us your questions about the economy to planet money at M P R dot org or tag us on social media. thanks. He is the episode .

this is planet money from npr.

Five years ago, we didn't episode about the american dream. What does IT take to climb up that economic letter? And how real is that latter anyway? Well, since then, there's been kind of an explosion and answers to those questions.

LED by work from rosh chetty and his team based at a harvard. You've got some new workout just recently, so here's our original episode and then will talk with rush study about the latest insight into the american dream from twenty twenty four. Here is cardin back in twenty nineteen.

once upon a time, in a cubicle not so far away, said a government bureaucrat in his government issued chair, preparing for a very big meeting. IT was one thousand nine ninety four, and mark shoulder was an economist at had the department of housing and urban development. And his team in dc had just flown in local public causing authorities from five major cities.

boston, chicago, as Angeles. In new york.

the staff gathers in a basement. Conference room is about thirty people. These are people who run what's now known as the section eight voucher program, which is a voulu er that subsidizes for low income families.

It's like a monthly payment to a landward. Families can wait years on, waiting less just to get one. Everyone settles into their chairs, sipping their government break coffee.

In the meeting starts, they learned that they are about to join a test program, small in the scheme of head overall, but a huge change. They are going to start handing out a new kind of voucher to a small group of their tenants. And then how is going to run an experiment on them?

Hasn't been an experiment quite like this ever before with .

the old boulders, people could, at least n in theory, move anywhere they wanted by people who get this new vouch. They are required to use IT to move to what HUD calls low poverty neighborhoods. Just a nicer. This is sort of a radical change for had .

a big part of the program had always been unlimited choice of neighborhood unlimited.

in theory at least. But what the majority of tenants have chosen was to use the vouchers to stay in high poverty neighbor ods for a lot of complicated reasons, including discrimination. Landlords often refused to take section ate tenants, so back in the basement at had, as this big new idea gets introduced, I imagine people do not put down their government brood coffee and start raising their hands.

Like, why are we doing this? Our job is to move people in to housing period. Now, how is basically asking them to reverse that, to move people out?

They couldn't believe that public housing authorities would would go along with inducing turn over among their tenants.

Mark, in the people running this meeting, they're like, yeah, I know. But now our job is to move people to opportunity. You know, the government spends money across all kinds of programs just trying to improve people's lives, like give them Better education or health, are increase their income. And the big idea that they want a test is, can we improve all of those things and more all at once, just by moving a family somewhere new? But of course, to get the government to give money, you have to prove that IT works.

If you want to really know whether this works not, you need an experiment.

You know, control group, independent variable. We will run an actual the scientific experiment, and we will track the data for decades.

The only randomised experiment, the test, the impact of neighbourhood on people's lives.

Can changing someone's address change their life? The answer to that seems very obvious. But this experiment did not at all go as planned.

Almost everything about moving to opportunity has been a surprise, not only to me, but to practically everybody else.

Hello and welcome to planet money. I'm current define today on the show, we are writing a social policy roller coaster alongside the researchers who ran this experiment and the people they tested IT on, the people who were not always excited to be experimented on. IT is a quest to make the american dream a reality, a quest that economists thought failed but is in the midst of an unexpected.

This message comes from capital one. Banging with capital run helps you keep more money in your wallet with no fees or minimums on checking accounts. Whats in your wallet terms apply? See capital one that comes slash bank for details, capital one N A member F D I C.

This message comes from american express. When you're with A M X business, platon, you have the car that helps you do more of what you love, like a flexible spending limit that adapts with your business and five times membership rewards points on flights and prepaid hotels. Book on M X travelled outcome.

That's the powerful backing of american express. Not all purchases will be approved. Terms apply.

Learn more at american express outcome. Slash M X business. This message comes from dell technologies during delt technology's early holiday savings event. Save on select pcs like the X P S sixteen that accelerate A I with intel coral to processors. Shop delt com slash deals.

mark. And this tiny band of public housing staff leave that conference room, go forth from D. C, and start signing up tenants.

The way that worked was this tenants from the five chosen cities would be assigned by later y to one of three groups. Like any good experiment, there would be a control group. This group already lives in public housing, and they would stay in public housing.

So no change to group one. Group two would get a regular section eight voucher. This is the rent subsidy that they can theoretically use with any landor's who will take IT.

And group three, this group is the experimental group. They would also get the section ate vulture, but they had to use IT to move out to a completely different neighbourhood. One, we're just ten percent or less of their neighbours were what the government has classified as poor.

For context, most of them had been living in igher hoods with about fifty percent poverty. So had was asking them to move to what should hopefully be a Better neighbourhood. But not everyone was excited about that.

There were some people who were praying, literally praying they would be in the regular vouch group, because they, they did not want to have to, to find another place that far away, either socially or physically.

When hodd surveyed families about this, the family said, yes, we do one of voucher, but we want IT just because we want to make sure our houses decent and we wanna get into a safer only .

like number three or four was a Better, Better schools for my tt children. Better jobs for were way down there .

for them. Housing was just housing. That opportunity.

I think they didn't buy into the hypothesis we were testing .

was that disappointing?

um. I have to say that I wasn't that surprised. We're asking them to do something that people were not doing.

The vast majority of people who get vouchers do not use them to move to areas with lower poverty. Also, mark and his head crew were asking people to participate in a science experiment on themselves, asking them to be living test subjects for a theory they have not proven yet, which is an especially hard thing to take from the federal government, a government that has a history of intentionally segregating people of colour into high poverty neighbor ods.

The experiment took years to set up, but in the end about forty six hundred families were part of IT, and in one thousand and ninety four the moving began. We were not able to talk to the families that moved, but mp s. Morning edition did cover the study while IT was happening.

Stephen sleep spoke to a mother named Shirley HUD now who had moved with her fifteen year old son. Brian SHE talked to about some of the things that do make these kinds of moves hard. When brian moved out a bald Moore, he lost touch with his friends. He was expelled from junior high school for fighting with his new classroom mates.

I was like, have I have I failed? Or what is really happening in the thing that I found out that I was him having to adjust, feeling that I was taking something away from him until I released down, and taught to him that this was for his Better. For four years, across the five tested, people like surely moved, and the researchers waited. And in two thousand and eight, the researchers finished gathering the data. And what I told them surprised them.

impacts we expected um in many ways didn't happen, impacts that we didn't expect IT did happen.

For one thing, moving was Better for girls than for boys.

Expect parents .

reported Better health, something i'd had even originally planned to measure improved mental health and physical health.

We saw impacts on diabetes, obesity.

all of which, of course, is wonderful. But this is not what the experiment was designed to test. What they wanted to test was the, quote, long term housing, employment and educational achievements of families involved.

And this massive, scientifically designed and rigorously tested social experiment that had moved thousands of people. Just to answer the question, can changing someone's address change the course of their economic life? The answer to that question was no.

We did not find any impacts on children's tesco's. We did not find any impacts on grown ups earnings.

basically no impact on educational outcomes, employment or income if you want to improve those things. The final report said. Housing is not your answer. Housing is just housing.

And with that, all of the hopes and dollars and research and programs that have been going towards this idea about housing, a lot of that just got rerouted to other ideas. But then this thing happened about four years after that final sad mto data came out. Another researcher, badge ed, into his government cubicle, this time on the tent floor of the I.

S. Headquarters in dc. And like mark, he wanted to understand how to improve people's economic lives.

We had been working with data at the irs. 对。

this is a thin hendry's, an economist from harvard. And for a few years, he, in some of his research pals, had been granted access to tax records at the irs with all kinds of privacy restrictions.

Of course, I was a sets. Whether you had, you know, ten thousand people in your data set, you were quite excited in this data. You know you're dealing with millions.

Having that much data allows them to be so much more precise.

And what that allows you to do is really put a sharp knife in the year analysis and really uncover patterns.

Nathan is trying to understand the impact of tax policies on upward mobility, which is economists speak for. Can you achieve the american dream? Can a child go from the bottom income ket to, over time, the top income bracket? And this is an issue that has become increasingly urgent right now.

The data says that you are twice as likely to be able to achieve the american dream in europe, or at least a lot of countries in europe. So Nathan is loading at tax records from across the country. And he does start seeing a pattern, a pattern that surprised him. That huge mto study IT looked like he had missed something, something enormous.

Actually, I remember red that the day .

vividly after the break, the experiment that changed everything has to change.

This message comes from A P, R sponsor excEllent, powering ten in a half million customers. C E O kelvin Butler shares one way that excEllence family of utility companies aims to support the communities they serve.

We invested over eight twenty million dollars in workforce development programs in twenty twenty three and expect to do the same in twenty twenty four. Because if you are going to serve diverse populations in diverse cities, you need to have employees from the cities in which you serve to learn more.

Go to excelling corp that come slash energy best. This message comes ship bob. The holiday seem to start earlier every year for e commerce brands, so make sure you're prepared to handle the increase ed order volume with ultimate galactic from ship hub.

Thousands of e commerce brands out sorts their fulfilment to ship up for the fastest, most host effective shipping to meet their delivery promise. Go to ship bob 点 com， that is S H I P B O B dot com for a free quote and get your store in shipshape with ship bob. This message comes to media sponsor fidelity investments, where a dedicated fidelity advisor can work with you on a comprehensive plan to reach your wealthy full potential, plus you'll have access to specialist in a state planning strategies. So you're not just growing protecting your wealth, you're sharing IT more at fidelity 点 com， slash wealth investment, minimum supply, fidelity broken age services. Lc.

okay. So nath's hydron was new deep in all of this income tax data at the R S. Alongside his researcher, power rudd tedy.

So russia, I were both working away at the internal .

revenue service. They'd seen this data that showed a pattern. People who are rising from the bottom income bracket to the top income bracket aren't just randomly scattered across the country.

They're clutter and your chances of escaping poverty very widely depending on which cluster you're in. So Nathan digs in deeper. He's starting to look at families who moved into higher mobility neighbourhoods.

longer a child spent in a neighbourhood with higher rates of approach ability, the higher their outcomes were in adult hood.

Like, let's say, you have two kids and you move them to this Better neighbor. Od, and one of your kids is for when you move, and the other one is eight.

you'd actually see higher outcomes on average for the four year old relative to the eight year old.

Where you live matters for whether you have a shot at achieving the american dream, which sounds terribly obvious, but that contradicts what moving to opportunity found. That huge HUD study.

At that point, we were of the mindset of valleys. We should probably get the mt. o. data.

Nathan starts to map income tax data from the actual mto participants, and this more precise mto data confirms the pattern that they saw nationally. In fact, the data is so strong that they can say the new neighborhood actually caused the person's economic improvements. That's how much a change of address mattered.

But they also start to realize that IT really only mattered for a subset of the empty I O participants, only for kids who were Younger than thirteen years old when they moved. And this explains why had missed this outcome. Nathan was looking at the data in two thousand fourteen. Had had last looked at this data six years before that, in two thousand eight.

back in two thousand and eight, you wouldn't have seen IT the children there just warn enough Young children into the labor where you'd really be able to say, looks like there's an effect here um but you wait five years and all of a sudden you can really start to see these these patterns emerge.

Those Younger kids had now grown up, started adding money, started producing income tax data. And they were finally grown up enough now for the data to reveal itself. And what the data was saying was that housing had been hope, even though they had spent fourteen years on this study, they had just counted IT out too early. It's so crazy how just by happens stands kind of guys, we're studying this at a moment where you could actually see that yeah.

it's nice to get lucky sometimes what .

they found specifically is that kids who move under the age of thirteen over time, they learn about thirty percent more.

four points more coin .

pregnancies, likely. The data also seems to indicate that these benefits will probably be passed on to their children. This all did come with a cavy ot for kids who are moved when their older than thirteen, they earn less over time.

The move is actually slightly harmful for that group. But when you look at the Younger kids and over time, as they earn more money, they pay more income taxes. And with that, the program actually looks like IT pays for itself. So Nathan, in his research piles, are looking at all of this really exciting data.

could feel that that we had something that was going to change the way people thought about neighbourhoods and change the way people thought about inequality opportunity in the united states.

They write all this up in a paper, they release IT. And then overnight .

we were indicted. We got a lot of emails from people who were eager to think about what we should be doing a to use housing policy as a way to think about improving upward mobility products for children who are most disadvantaged.

Ah, did you get a lot of those emails before this?

No, no, yes, we did.

Not many of these emails are coming from people who work in public causing who are saying, look, now that we know that this thing works, we should reboot the original HUD program. And Nathan is excited about that prospect. But he does know that if they reboot this, there needs to be an important addition.

Because in the original program, way back in the nineties, people who were given vouchers on the condition that they had to move to a Better neigh's od, more than half of those people, just like gave the vouch back, basically said, I would rather forfend this than be told where I have to move. So if nothing wants this to be more than just a nice research paper with nice data about opportunity, someone will need to figure out how do you get people to actually move to that opportunity. So Nathan in his team, they start working with cities to basically reboot, moving to opportunity.

The original N, T, O program is required. People who got the special vouchers to move to low poverty areas, but in this remote families can choose to move whatever they want. What Nathan in his team are trying to test is whether people have not been moving to opportunity because they don't want to, or is that just because they need a little support?

So in their first tested in seattle, one group gets a voucher and the other group gets a voucher, but also support a sort of housing councillor to help navigate things like transportation in the new neighborhood, even helps cover security deposits. These councilors also work with landor's. Could this simple intervention get people to move voluntarily?

IT didn't distribution as the most what would have been the most effective going in.

but they tried IT out in seattle. And after a year.

more than half of the families end up using the voucher. And a neighbor od that has high, high Operate mobility.

more than three times the number of people chose to move to an area with higher opportunity when they were given support from a councillor. And all of this data from the original empty o study, this new one, was so compelling that the unthinkable happened. Congress recently passed a bipartisan bill giving federal funds to replicate programs like this across the country.

Nathan and that team will also be expanding to new cities. And yes, we do now know that housing policy can be hope. Housing policy, we are sorry, we underestimated you. Thank you for your service. But for now, we can probably only call IT a sliver of hope because the number of families whose lives are improving through this program is really just a tiny drop in a much bigger pool.

That is where we let the story back in twenty nineteen. And since then, the researchers have been busy. They're known as the opportunity insights team based at harvard, and they have put out a steady stream of papers that have made the director rush chetty into something of an economic rock.

Start our own. The newsletter er writer, greg si called them the beyonce y of economics because each dew's aper is like an album drop. Anyway, before we get to his latest release, we asked rosh teddy himself to catch us up on the biggest hits or maybe a findings since our original episode.

yes. So one of the basic client tings that's emergence of the research over the past decade is that where you grow up plays an enormous role in shaping your long term outcomes. And what we've been focused on since identifying that result is trying to figure out why is IT because of resources available in the area, the quality of schools, the quality of jobs, public transit is about who you're interacting with, who you're influenced by. And what we found in a natural is that social capital who you're connected to, and in particular, the amount of interaction between low and high income people in a given area is one of the strongest predictors of differences. And economic .

mobility is newspaper called changing opportunity, is about how the gap between rich and poor is changing over time. So is IT more or less likely that a poor kid will end up rich? So to do this, they looked at data from fifty seven million people born between the late one thousand nine and seventies and early nineteen nineties.

We find that in some places, and for some subgroups, black americans, for example, growing up and moon and families, they now have Better, slightly Better chances of rising up than they didn't the past. In many places, White kids growing up and low income families, unfortunately, have worse chances uprising up then they did in the past. So what is leading to these despair changes across sub groups, across areas. We look at many different factors, and what we find is that there's one variable that strongly predicts these differences, which is the change in the share of parents who are working in the subgroups in the area on which you grew up.

So if you grow up in a community where more of the adults are working, you have more of a shot at rising up. And over time, low income White communities saw steep drops and employment rates. Compared to black communities.

the black White gap and economic mobility has fAllen by one third.

in part because poor White communities are falling behind where they used to be.

IT comes back to the influences of social interaction. If you're growing up in a thriving community where lots of adults can inspire you to pursue career in uh, you know, engineering or connect you to an internship opportunity here or give you a sense of what kind of college could be good for you, that puts you out a very different trajectory. Then if you're growing up in a community where all those things have have disappeared.

rush says he was surprised at how fast some places changed in just over a decade or so. Some communities created more opportunity, many low income black communities, for instance. And even if some other ones changed in the wrong direction, the idea that opportunity can change in a given place is hopeful to him.

That's what the most recent study shows, titled changing opportunity is actually possible to change places and make them higher opportunity areas for the kids living there.

He says the biggest and most powerful way to find opportunity for given kid from a poor family is still to move to opportunity, but he's making progress on figuring out what changes opportunity in a given place, so you can watch for more studies to drop on that front over the next few years.

Now that we know who will be president in twenty twenty five, help us make episodes that you want to hear. What questions do you have about a second trump presidency? Email us at planet money at M P R dot ord, or messages on social media.

We are at planet money. Today's episode was originally produced by a viva to cornfield and edited by brian or stat. This update was produced by shahn aldona and IT was fact checked by sara quotas.

Our executive producer is alex golmard and a Manda oran chic. This is npr. Thanks for listening.

This message comes to media sponsor marrow. Whatever your financial goals are, you want a straight forward path there. But the real world doesn't usually work that way.

Mary understands that. That's why with a dedicated maria advisor, you get a personalized plan and a clear path forward. Go to M, L, dot com, slashed, bullish to learn more marrow, a bank of amErica company.

What would you like the power to do? Investing involves risk. Mary linch peer spanner in Smith incorporated, registered broker dealer, registered investment advisor, member as I, P.

C. This message comes to media sponsor marrow. Whatever your financial goals are, you want a straightforward path there.

But the real world doesn't usually work that way. Maria understands that. That's why with a dedicated maril adviser, you get a personalized plan and a clear path forward.

Go to M L 点 com slash bullish to learn more marrow， a bank of amErica company. What would you like the power to do? Investing involves risk.

Mary lynch, peer spanner in smith, corporate registered broker dealer, registered investment advisor, member as I P. C. And a special thanks to our funder, the offered peace alone foundation for helping to support this podcast.