James J. Heckman and Sadegh Eshaghnia
What drives social mobility? The answer matters to policymakers and families alike. A wave of highly publicized research has led public policy and public discussions astray. It claims that the neighborhood a child lives in is the key factor that shapes his life. While this idea has been around for decades, it has recently gained more traction. Mainstream media have promoted the idea in article after article, arguing that ZIP Code is destiny and a major source of inequality in the U.S.
If the causal relationship between neighborhoods and child outcomes is strong, policymakers can implement a simple and effective solution: relocate struggling families to residential areas with better conditions. But this has been tried. In the 1990s the Department of Housing and Urban Development moved families out of high-poverty neighborhoods in the so-called Moving to Opportunity experiment. Moving to a better neighborhood had some benefits, but it didn’t improve employment outcomes for adults or educational outcomes for youths.