Do government efforts to support low-income families work? Since the War on Poverty in the 1960s, skeptics have argued that even if these programs provide temporary relief, the only long-term impact is increased dependency — witness, they say, the persistent lack of mobility in places like inner-city Baltimore.
But a growing body of research tells a very different story. Investments in education, income, housing, health care and nutrition for working families have substantial long-term benefits for children.
Consider Moving to Opportunity, an experiment in the 1990s that gave families housing assistance, in some cases contingent on their moving to less poor neighborhoods. Initial evidence from the randomized trial was disappointing, finding little or no improvements in test scores for children or earnings for adults. A new paper by the Harvard economists Raj Chetty, Nathaniel Hendren and Lawrence F. Katz, however, followed the children for another decade. It found that traditional rental vouchers had increased their earnings as adults by 15 percent, and experimental vouchers, which required people to move to less poor neighborhoods, by 31 percent. The additional tax revenue from these higher earnings was enough to repay the program’s cost.
This is only the latest in a number of recent studies that use big data to understand the longer-term effects of a range of government programs.