Neighborhood Effects on Barriers to Employment: Results from a Randomized Housing Mobility Experiment in Baltimore

Publication Year
2006

Type

Journal Article
Abstract
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 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 oppor tunity 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 sur veyed. Pooling data from all five cities, a recent study finds no significant effects on employment or earnings of adults in the experimental group, suggest ing 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 insignif icant. The experimental group in Baltimore had lower average earnings than the control group. The lack of a large positive effect on employment and earn ings 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 experiment?is and controls have similar rates of employment and earnings, both at the time of the survey (2002) and qualita tive interview (2003-04), the nature of respondents' relationship to the labor force does differ by program group, at least in the qualitative sample. Addi tionally, we identify three barriers to employment that are common across pro gram groups. Using these data, we generate hypotheses about why the MTO intervention may not have as strong an effect on the employment or earnings of Baltimore participants as originally projected. First, many of the MTO experiment?is 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 concen trated in retail and health care jobs. To get and keep jobs, many of these respon dents relied heavily on a particular job search strategy?informal referrals from weak social ties (work contacts, acquaintances, or casual associates) who already held entry-level jobs in these sectors. Though experiment?is were more likely to have employed neighbors, few of their neighbors held jobs in these sectors and therefore were not providing such referrals. Controls have fewer employed neighbors overall, but they were more likely to come across these useful weak ties in the course of their daily routines. Finally, the configuration of the Baltimore metropolitan area's public transportation routes in relation ship to the locations of most jobs, in particular hospitals and nursing homes, posed special transportation challenges for experimentals as they searched for employment or tried to retain their jobs.
Journal
Brookings-Wharton Papers on Urban Affairs
Pages
137-187