Welcome to the Profit of Education website. Continuing the conversation begun in the book Profit of Education, we discuss the latest economic evidence on education reform.

Better schools versus better neighborhoods

Do we have to fix neighborhoods to get better education for poor kids? Let’s hope not. There’s strong evidence that better neighborhoods don’t improve educational outcomes if the better neighborhoods don’t also have better schools. Roland Fryer and Lawrence Katz write about the evidence in a paper in the newest American Economic Review Papers & Proceedings. (Katz also talks about  the evidence in his Society of Labor Economics Presidential address.)

A federal government experiment between 1994 and 1998 (“Moving to Opportunity”) randomly chose poor families living in public housing in high-poverty neighborhoods to receive a housing voucher that let them move to much better neighborhoods. Fryer and Katz follow-up on the differences the vouchers made after a decade or more. Those who moved did end up in much lower poverty neighborhoods, poverty rates dropped roughly from 53 percent to 34 percent. There were good results from the move in terms of health and self-assessed well-being. (See Ludwig et. al.) So in important ways the better neighborhoods improved lives of poor people.

But schools weren’t much different in the new neighborhoods. Average test scores in the new schools were only three percentile points higher and free or reduced-price lunch participation fell by only four percentage points. So what happened to education with better neighborhoods but the same-old kind of schools?

Academic achievement? Educational attainment? Essentially zip. Nothing improved. And this includes kids who grew up in the better neighborhoods, not just those who moved after starting school.

Very discouraging news for those who think that if only we can fix neighborhoods our educational problems will be taken care of too.

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