Vouching for the effectiveness of urban housing vouchers

Assistant economics and public policy professor Jeffrey Kling recently worked on Moving to Opportunity, a federal program to help families move from poor neighborhoods to more prosperous ones. The program, under the aegis of the Department of Housing and Urban Development, studied the results of giving families housing vouchers.

Participants in the MTO study were divided into three groups. The Experimental group received housing vouchers to move to low-poverty areas. Another group, the "Section 8" group, named after a legislative provision that set up housing vouchers, received vouchers to move anywhere. The control group continued to receive traditional public assistance. Preliminary results released by Kling and his Harvard collaborators show families that received vouchers are better off than the families that did not, with families that received geographically restricted vouchers faring better than both other groups in some areas. He recently spoke with 'Prince' Contributor Molly Bloom.

'Prince': How did you become involved in the program?

Kling: Well, the office of population development and research at [HUD] had a small grant competition in the fall of '94 . . . And the awards were made in '95. My group was one of five that were awarded grants to work on the demonstration. We were the only group on the Boston site.

P: How is the MTO program different from other housing-voucher programs?

K: It has three components . . . The thing that makes it particularly unique is the fact that the applicants were randomly assigned to one of the groups. That is very helpful to the research in terms of discovering the causation effects on outcomes.

As far as to how those regimes differ from other types of housing policies . . . the control group gets a common form, (as does) the Section 8 group . . . The experimental group is unusual in having to (move to specific areas).

P: What role, if any, does race play?

K: Almost all of the participants are members of racial or ethnic minorities. In Baltimore and Chicago, it's almost all African-American, and there's a mixture of African-American and Hispanic in the other cities. We're talking about a program that's intended to serve ethnic minorities.

The public housing projects were chosen . . . based on being in census tracts with poverty rates of over 40 percent. Most of these projects were inhabited by racial [minority] groups. It wasn't designed to be a race-based project but there is a high correlation between race and income related [factors].

P: The results were just released for the short-term impact of the program. Can you extrapolate as to the long-term impact of the program?

K: We're undertaking some research now to see whether some of the impacts on mental health and child behavior seem to persist, so there's no specific reason to think that they wouldn't persist but we'll see . . . An area that has not been examined to such a large extent is educational outcomes for kids . . . So we'll see whether living in different neighborhoods has an impact on, say, reading scores or scores on math tests . . . So we'll see if what school you attend has an impact on those [factors].

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There's some suggestion and evidence that the two groups [given housing vouchers in Baltimore] seem to have somewhat higher test scores among younger kids, but there are a variety of issues that come up in doing that sort of analysis that make those results more tentative. We really need to have further study.

P: How, if at all, can this study translate into a national policy?

K: It is a national demonstration in the sense that it is happening in a number of places, in five major cities. The Section 8 comparison group does receive the same assistance that others already receive. The Section 8 group clearly is the best national model.

The new budget for the Department of Housing and Urban Development has an allocation for additional Section 8 vouchers, in addition to $13 million to renew existing vouchers.

P: Would it improve the families' welfare if their vouchers had restrictions?

K: I haven't come to a conclusion about that. The evidence shows that there are some outcomes that show impacts for the experimental group like reduced incidence of injuries or asthma attacks among children where you see significant effects . . . but the Section 8 comparison group does do well in a lot of dimensions. The restriction is something that some people don't feel is appropriate for their own circumstances. So it's not entirely clear which regime is appropriate.

At this point what's clear is that both are better than the control's experience of living in public housing.

P: There were improvements in social well-being, but not in economic aspects like employment, earnings and welfare receipts. Will changes in these areas come with time? How does the MTO program address that?

K: The program per se gives you a voucher to move to a new neighborhood. There is no part of the program that is specifically designed to address those economic self-sufficiency outcomes. There are a lot of reasons why you'd think it might make a difference in terms of how residence location might impact opportunities to find employment, for example, but whether those opportunities are there and whether those individuals can take advantage of them . . . isn't something that this program is designed to address in any specific way.

P: How does the program help with the transition between neighborhoods for the families?

K: Each experimental group is assigned a mobility counselor. The main role of the mobility counselor is to find them an apartment in a low-poverty census tract . . . but there's no extended contact between the counselor and the family.

P: How is the MTO program related to other efforts to help poor families?

K: We have a number of transfer programs in the U.S. There's food stamps . . . and other more specialized programs like supplemental social security income . . . and it's all part of what you might think of as the safety net toward providing economic security towards American citizens. This is one aspect of the safety net.

One thing that is different about housing subsidies as opposed to other types [of assistance] is that the majority of people who are eligible for them don't get them because there isn't enough to go around . . . With housing subsidies, typically you'd be on a wait list for a substantial amount of time.

So one of the implications of that is that it may be more well-targeted toward the neediest because if you're on the wait list for a while and if you still need it by the time you get to the top of the wait list, your situations are worse off than the average person at your . . . level. It's a program that's targeted at a population that's more needy.

Another aspect is that the housing units are something that the full family can take advantage of relatively equally. There is some concern about how food stamps . . . might be spent by the parent whereas with housing subsidies, it's clear what the family is getting and children have a potential to benefit as much as the parents . . . There are significant benefits to the children as well as the family. [In other programs] those gains don't always trickle down to the kids as with housing vouchers.

P: What is the effect of removing these presumably more motivated families from their old neighborhoods?

K: The assumption that these families are the more motivated in the first place hasn't really been verified. On the one hand, that's what I thought when I started. On the other hand, it's clear that the participants have a pretty good idea of when things are not going so well for them and when they might benefit from moving.

The lesson from the research is that families with boys with behavior problems are more likely to move with the program. You might think of this phenomenon as being connected with the story that mothers are concerned that their sons are hanging out with boys who might form a gang and so they decided to move. It is a type of motivation, a specific motivation about "I have this problem in my family and moving it will solve this problem."

If that's the case going on . . . then you wouldn't necessarily think of them as the cream of the crop, but the most at risk. That makes them most likely to move. There's not very good evidence one way or the other about the families in the original areas and the moves one way or another.