Neighborhood disorder and individual economic self-sufficiency: New evidence from a quasi-experimental study

This paper draws on data from the Monitoring Mt. Laurel Study, a new survey-based study that enables us to compare residents living in an affordable housing project in a middle-class New Jersey suburb to a comparable group of non-residents. Building on the theoretical and empirical contributions of the Gautreaux and Moving to Opportunity studies, we test the hypothesis that living in this housing project improves a poor person’s economic prospects relative to what they would have experienced in the absence of such housing, and that these improved prospects can be explained at least in part by reduced exposure to disorder and stressful life events. We find that residents in the Ethel Lawrence Homes are significantly less likely to experience disorder and negative life events and that this improvement in circumstances indirectly improves the likelihood of being employed, their earnings, and the share of income from work. We find no relationship between residence in the housing project and the likelihood of using welfare.

► Housing project residents show improved economic outcomes relative to nonresidents. ► Residents are exposed to less stress and disorder than nonresidents. ► Lower disorder and stress translate into improved economic outcomes for residents. ► This impact appears to be cumulative.