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 find 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.