Raj Chetty’s latest research on the HOPE VI public housing experiment : Planet Money : NPR

This housing program helped kids escape poverty — by changing who they befriended

Library of Congress / Keith Romer/NPR

You know that feeling when your favorite band releases a new album?

Okay, so, for me, that's not exactly what it's like when Harvard economist Raj Chetty and his team at Opportunity Insights release another big study. But it's close!

Chetty and his team do incredible research. Part of it is the stuff they study really matters. They seek compelling evidence on what actually works to fight poverty, reduce inequality, and rejuvenate the American Dream of upward mobility.

But what makes Chetty and his team's research so special is how they research these topics. They get their hands on remarkable datasets, which are massive, rich, and authoritative. And then they crunch this data in creative ways to figure out how we can solve core economic problems. Many of these research projects take years to be published, and when they finally are, it's like Radiohead dropping Kid A or something.

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Well, Chetty and his team have dropped another study that slaps. And it's making us think really hard about the fact that so many American kids grow up in neighborhoods that are economically segregated and socially isolated.

For years, Chetty and Opportunity Insights have been amassing evidence that the neighborhood that a kid grows up in matters dramatically for their economic destinies. (Planet Money did an episode about one of those studies; and we've done plenty of newsletters and Indicator episodes about other studies as well).

Much of that research focused on what happens when impoverished kids move to more affluent neighborhoods. In short, their lives are transformed. Chetty and his colleagues find that kids from low-income households are much more likely to climb the economic ladder if they grow up in a good neighborhood.

But the reality is many poor kids aren't able to move to good neighborhoods. The question in this new study is: can policymakers transform some of America's most impoverished neighborhoods, which have abysmal rates of upward mobility, into better neighborhoods where kids have a much greater shot at escaping poverty? And, if you can transform these neighborhoods and that does increase kids' chances of climbing the economic ladder, how and why does that happen?

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To answer these questions, the economists look to a kind of natural experiment from recent history, created by a nineties-era federal program with a name that sounds like a Star Wars sequel: HOPE VI. In a recent interview with Planet Money, Raj Chetty told us it was essentially " the largest effort ever in the U.S. to revitalize high-poverty neighborhoods."

In the early 1990s, the federal government used HOPE VI to demolish the nation's most distressed public housing projects and transform them into new, mixed-income housing complexes, essentially integrating low-income families into neighborhoods with more affluent families. The program was pretty controversial, particularly since lawmakers failed to replace all the public housing units that they destroyed and many residents were displaced.

Chetty and his colleagues don't really endorse the whole program. Instead, they use data it generated to see what happens when disadvantaged kids get raised in less eco