Analysis of the data from the experiment shows that those who moved to lower-poverty areas when they were 12 or younger were found to earn about 30 percent more, on average, in their early- to mid-twenties compared to those who did not move, were 27 percent more likely to have entered college, and 30 percent less likely to be a single parent. The MTO experiment again illustrates the importance of neighborhood effects on child development early in childhood. It also demonstrates that grants to move families to lower-poverty neighborhoods may reduce the intergenerational persistence of poverty. Of course, mobility of the sort that Chetty and other researchers have emphasized interacts in a very important way with the availability of affordable housing. Making high quality neighborhoods accessible to families from all socioeconomic backgrounds is a major challenge for public policy. Of course, illegal racial and other discrimination has played a role in preventing access to high-quality neighborhoods. However, part of the challenge arises from the fact that in a free-market economy, the quality of the environment is reflected in the price of land – and thus housing – in that place. This means that the neighborhoods with the best schools, the best access to jobs, shopping, recreation and other amenities will be the most desirable and will have the highest cost of land and housing. Simply put, families seeking the upward mobility that better neighborhoods can promote may well find that housing in these neighborhoods is unaffordable.
William C Dudley: Economic opportunity and income mobility Remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Association for Neighborhood and Housing Development Annual Community Development Conference, New York City, 11 April 2016. *  *  *  Good morning. I am very pleased to speak at the 6th Annual Community Development Conference. I would like to give a special thanks to the Association for Neighborhood and Housing Development for organizing this conference about issues of importance to the community development industry and to the future of New York City. At the Federal Reserve Bank of New York, we develop a wide variety of research and data products to gain a deeper understanding of regional economic conditions. We track the health of household balance sheets at the state and local level using data from the New York Fed’s Consumer Credit Panel. We also conduct an annual poll of small businesses to understand their credit needs and credit availability. My meeting with you today is part of our continuing efforts to understand what is going on at the grassroots level of our economy and to share insights from the New York Fed. The Federal Reserve has dual objectives, set by Congress, with respect to monetary policy – maximum sustainable employment and price stability. I would like to focus my remarks today on the first of these objectives.