Improving the life chances of disadvantaged children.

• Author: Ludwig, Jens
• Position: Research Summaries

Improving the schooling outcomes for disadvantaged children is central to efforts to reduce overall inequality and for increasing economic growth. Around 78 percent of white high school students graduate within four years, compared to 58 percent of Hispanics and 55 percent of blacks. (1) In the federal government's 2007 National Assessment of Educational Progress, only 16 percent of fourth-grade students who were eligible for free lunch scored at proficient levels in reading, compared with 44 percent of those with higher family incomes. (2) These large disparities understandably have intensified concern about how to improve our system of public schools.

The possibility that some of the most effective ways to improve school outcomes might not have anything to do with elementary or secondary schools first was raised in a landmark 1966 study named after its lead investigator, the distinguished sociologist James S. Coleman. (3) The "Coleman Report" made several remarkable claims, including: the black-white gap in school "inputs" was much smaller than generally perceived; school inputs were only weakly correlated with student test scores; among the strongest correlates of test scores were family background and the socio-economic composition of the child's school; and, disparities in test scores open up very early in life, so that for example the black-white test score gap was already 1.5 standard deviations by first grade. Subsequent studies have shown that these disparities are evident in the pre-school years, in part because of disparities in early learning environments. By age three, children in professional families have larger vocabularies than the parents of children in families on welfare. (4)

My research and that of other NBER family members suggests that segregation, poverty, and other aspects of the out-of-school environment, particularly early in life, indeed seem to matter for children, but apparently more so for behavioral outcomes like schooling attainment and criminal behavior than for achievement test scores.

Social Context

Since at least the 1920s, social scientists have thought that child development may be heavily influenced by the child's social context, including the interactions with peers that shape the returns to different behaviors, the information that local adult role models convey about the value of schooling and formal labor market involvement, and the quality of local institutions such as schools and police. These beliefs are consistent with the substantial cross-sectional variation observed in children's learning and other outcomes across schools and neighborhoods of differing socio-economic and racial compositions. Yet in practice, isolating the causal effects of social context on children's life chances has been quite difficult because of the endogenous sorting of families across schools and neighborhoods.

To identify and estimate the causal effects of neighborhoods on children and families, the U.S. Department of Housing and Urban Development (HUD) sponsored the Moving to Opportunity (MTO) residential mobility experiment. Started in 1994 in five cities (Baltimore, Boston, Chicago, Los Angeles, and New York), MTO enrolled a sample of 4600 public housing families with children and via random lottery offered some families the chance to use a housing voucher to move into a...