Neighborhood Effects on Barriers to Employment: Results from a Randomized Housing Mobility Experiment in Baltimore
Moving the poor out of inner-city neighborhoods of concentrated poverty (where jobs are scarce), and into low-poverty suburban neighborhoods (where jobs may be more plentiful) has been suggested by Wilson's (1987) theory of social isolation and Kain's (1968) theory of spatial mismatch to lead to greater [End Page 137] employment and earnings. Between 1994 and 1997, the U.S. Department of Housing and Urban Development (HUD) launched the Moving to Opportunity for Fair Housing Demonstration Program (MTO) in an attempt to examine the effects of housing mobility on various factors including economic self-sufficiency. The MTO demonstration gave families living in distressed public housing in Baltimore, Boston, Chicago, Los Angeles, and New York the opportunity to relocate to private market housing in low-poverty suburban and city neighborhoods. MTO applicants were randomly assigned to one of three groups: an experimental group, with members receiving a voucher to be used in a census tract with a poverty rate of less than 10 percent; a Section 8 group,1 with members receiving a voucher to move anywhere; or a control group. In 2002 all participating families, regardless of their MTO start date, were surveyed. Pooling data from all five cities, a recent study finds no significant effects on employment or earnings of adults in the experimental group, suggesting that receiving a voucher to move to a low-poverty neighborhood does not increase the economic self-sufficiency of poor families.2
In this paper we use data from an embedded in-depth qualitative study of MTO families in Baltimore to explore the social processes that might underlie these results. We present survey data from Baltimore that estimate the effect of the MTO vouchers on employment and earnings of adults, compared with the results from all five MTO cities. The difference in employment rates for the experimental and control groups is positive and of moderately large magnitude in Baltimore (larger than in the five cities combined), but statistically insignificant. The experimental group in Baltimore had lower average earnings than the control group. The lack of a large positive effect on employment and earnings is puzzling. In 2003 and 2004 we conducted in-depth interviews with a random sample drawn from all the Baltimore MTO families. Although the qualitative sample is relatively small, the in-depth nature of the data allows us to derive hypotheses that can be used to guide further qualitative work and the next round of survey work with the MTO population, scheduled for 2007.
We find that though experimentals and controls have similar rates of employment and earnings, both at the time of the survey (2002) and qualitative interview (2003–04), the nature of respondents' relationship to the labor force does differ by program group, at least in the qualitative sample. Additionally, we identify three barriers to employment that are common across program groups. Using these data, we generate hypotheses about why the MTO [End Page 138] intervention may not have as strong an effect on the employment or earnings of Baltimore participants as originally projected.
First, many of the MTO experimentals had significant human capital barriers—including lack of adequate education and work experience, as well as mental and physical health problems—before moving to a low-poverty neighborhood. The MTO demonstration was not designed to address these deficits. In addition, employed respondents in both groups are heavily concentrated in retail and health care jobs. To get and keep jobs, many of these respondents relied heavily on a particular job search strategy—informal referrals from weak social ties...
