Not all low-poverty neighborhoods are created equal, say Cleveland Fed researchers

For several of the important characteristics that help to determine neighborhood quality, black low-poverty neighborhoods are more comparable to white high-poverty neighborhoods than to white low-poverty neighborhoods, say Federal Reserve Bank of Cleveland researchers Dionissi Aliprantis and Daniel Kolliner.

Investigating the relationship between neighborhood poverty and other neighborhood characteristics, the researchers focus on the five cities involved in the Moving to Opportunity (MTO) housing mobility experiment: Baltimore, Boston, Chicago, Los Angeles, and New York. For MTO, volunteering households who were receiving public housing assistance and who lived in high-poverty neighborhoods were randomly given a housing voucher that could be used toward rent in a low-poverty neighborhood.

Aliprantis and Kolliner find that MTO program participants could have moved from high-poverty to low-poverty neighborhoods without experiencing a change in other characteristics that determine neighborhood quality, such as the unemployment rate, median household income, educational attainment, and share of single-headed households. They also show that the moves typically made by MTO participants—from one predominately black neighborhood to another—were less likely to change neighborhood characteristics than were moves to white low-poverty neighborhoods. These findings highlight the importance of considering a variety of neighborhood characteristics in assessing neighborhood effects, say the researchers.

Blacks and whites have continued to live in very different neighborhoods since the end of legal discrimination, and researchers have been investigating how these differences shape opportunity. Aliprantis and Kolliner say neighborhoods might influence an individual’s opportunities through pathways such as schools, personal security, employment networks, access to public resources, and types of individuals with whom one interacts.

Read Neighborhood Poverty and Quality in the Moving to Opportunity Experiment

Federal Reserve Bank of Cleveland

The Federal Reserve Bank of Cleveland is one of 12 regional Reserve Banks that along with the Board of Governors in Washington DC comprise the Federal Reserve System. Part of the US central bank, the Cleveland Fed participates in the formulation of our nation’s monetary policy, supervises banking organizations, provides payment and other services to financial institutions and to the US Treasury, and performs many activities that support Federal Reserve operations System-wide. In addition, the Bank supports the well-being of communities across the Fourth Federal Reserve District through a wide array of research, outreach, and educational activities.

The Cleveland Fed, with branches in Cincinnati and Pittsburgh, serves an area that comprises Ohio, western Pennsylvania, eastern Kentucky, and the northern panhandle of West Virginia.

Media contact

Doug Campbell, doug.campbell@clev.frb.org, 513.218.1892