Neighborhood Effects and Housing Vouchers

51 Pages Posted: 1 Mar 2021 Last revised: 6 Mar 2021

See all articles by Morris Davis

Morris Davis

Rutgers, The State University of New Jersey - Rutgers University, Newark

Jesse Gregory

University of Wisconsin - Madison

Daniel A. Hartley

Federal Reserve Bank of Chicago

Kegon Tan

University of Wisconsin - Madison - Department of Economics; University of Wisconsin - Madison - Institute for Research on Poverty

Date Written: February 2021

Abstract

Researchers and policy-makers have explored the possibility of restricting the use of housing vouchers to neighborhoods that may positively affect the outcomes of children. Using the framework of a dynamic model of optimal location choice, we estimate preferences over neighborhoods of likely recipients of housing vouchers in Los Angeles. We combine simulations of the model with estimates of how locations affect adult earnings of children to understand how a voucher policy that restricts neighborhoods in which voucher-recipients may live affects both the location decisions of households and the adult earnings of children. We show the model can nearly replicate the impact of the Moving to Opportunity experiment on the adult wages of children. Simulations suggest a policy that restricts housing vouchers to the top 20% of neighborhoods maximizes expected aggregate adult earnings of children of households offered these vouchers.

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Suggested Citation

Davis, Morris and Gregory, Jesse and Hartley, Daniel A. and Tan, Kegon, Neighborhood Effects and Housing Vouchers (February 2021). NBER Working Paper No. w28508, Available at SSRN: https://ssrn.com/abstract=3795027

Morris Davis (Contact Author)

Rutgers, The State University of New Jersey - Rutgers University, Newark ( email )

180 University Avenue
Newark, NJ 07102
United States

Jesse Gregory

University of Wisconsin - Madison ( email )

716 Langdon Street
Madison, WI 53706-1481
United States

Daniel A. Hartley

Federal Reserve Bank of Chicago ( email )

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Chicago, IL 60604
United States

HOME PAGE: http://www.danielaaronhartley.com

Kegon Tan

University of Wisconsin - Madison - Department of Economics ( email )

1180 Observatory Drive
Madison, WI 53706
United States

University of Wisconsin - Madison - Institute for Research on Poverty

1180 Observatory Drive
Madison, WI 53706
United States

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