Looking at how place plays a role 
in upward mobility.
And I chose this for two reasons. One is,
I've increasingly believed this is one
of the defining issues of our time. It is
what I've spent most of my research
looking at, and it's really what I
focused on at HUD for the last three
years. But the second is that this talk
gives me the chance to focus on the way
that research informs policy. So, the
office that I ran at HUD was the Office
of Policy Development and Research, so it
was the core mission of that office, and
it is also a key component of the Wagner
education. So, I'll use one concrete
example of a policy I worked on at HUD
to give you an example both of this
specific research in this policy area
and the policy process itself. Okay. So,
while the US may think it has
the best health care system in the
country, we also think we have some of
the best upward mobility in the world --
not so true. If you actually compare the
United States to other similar countries,
we actually rank very low in mobility by
almost any of the measures that are
commonly used in the research. Right?
And the low upward mobility is particularly
driven by stickiness at the bottom.
So, for example, children born in the United
States in the lower quartile, or fourth
of incomes, have about a 47%
chance of moving up as adults.
That compares to Canada; it's about 14
percentage points lower in Canada. So,
less than a third of the bottom quarter
are going to end up in the bottom at the top.
That's a nice way to put it. The
biggest issues, or some of the most
troubling issues about the low mobility
in the United States, are the racial
disparities. So, for white children in the
US born in the bottom quarter of
incomes, they have about a 32% chance of
remaining there as adults compared to
black children born in the bottom
quartile, who have a 63% chance
on remaining there as adults. So, an
African American child born in this
country at the bottom of the income
distribution is twice as likely as a
white child in the bottom of the
income distribution
to be there as an adult. This low
economic mobility in the United States
has been getting increased attention in
last four or five years in the context
of increasing income inequality in the
US. So, income inequality in the US has
been declining since the 1970s. We're now
at a point that we haven't seen since 1928.
Think of a world in which
inequality is small.
In a country where that's true, you may be less troubled by low upward mobility than in a country
with large income inequality, and so
whatever you're born into as a child is
very, very different where you're likely
to get as an adult; big gaps.
So, that's the context where some recent research
about what drives the low mobility in
the US, has been getting a lot of
attention. You may have seen this map;
this is one piece of work from Raj
Chetty and other authors. It was in the
New York Times. There are lots of other
maps like this. This work has been getting a
lot of attention in the last two years
because it's at the nexus of place and
mobility. I want to talk about one part
of this study, which takes a HUD-funded
and -run experiment called Moving to
Opportunity, or MTO. Some of you may have
heard of it; you'll learn about it in
class. The MTO was a randomized trial
that took place in the late 1990s in
which low-income families were given
different types of vouchers. And the idea
behind the experiment was: if we could
get very low-income families who receive
housing assistance into better
neighborhoods, do the families do better
in the long run? What Chetty did is he
took this research, and he connected it
to tax returns, so that you could
specifically look at whether the
children who, by random chance, got access
to better neighborhoods, did better as
adults compared to similar children who
did not get that access. That was the
experiment,
and the answer is: do they do better? Yes,
they do better. By looking at the kinds
of measures that you would care about
for upward mobility, the children who, by
chance, got access to better
neighborhoods were more likely to go to
college, more likely to go to better
colleges, and they had higher earnings as
adults than similar low-income children.
So, place matters in upward mobility,
independent of family income. It has its
own influence, and we know in the United
States we have large disparities across
income and race in the places where
families get to live. Right? In the US,
most research shows that, actually, the
typical poor white family lives in a
neighborhood with lower poverty, lower
crime, and better schools than the
typical non-poor African American or
Hispanic family; huge variation. So, if you
combine that -- that place matters, really
matters, for life chances and upward mobility,
and we've got huge disparities in place --
that combination can explain one of the
reasons why upward mobility is so low in the US.
But the silver lining is it means
it also gives you a mechanism through
which we can improve upward mobility in
the United States. We can use place to
change the upward trajectory of
low-income and minority kids in the
country. And so, HUD took this research,
which was getting national attention --
attention from Congress, President Obama 
was briefed on it. We took the research,
and the policy attention and appetite, to
focus on a number of policies that would
move the needle on increasing access to
better places. So, let me talk about one of those.
The specific policy that I got
to work on in this space was focused on
the following problem: HUDs best
mechanism for helping very low-income
assisted families get into better
neighborhoods are household vouchers.
Right? Because you have choice and you
can move. On the ability of getting to
better neighborhoods, the policy is not
doing that well. Nationally, about 20% of
voucher families get into low-income
neighborhoods, so neighborhoods with a
poverty -- I'm sorry, low poverty
neighborhoods, so 10% poverty or less. But
in many metro areas, it's even worse.
In Baltimore, 4% of families
that get a voucher and have kids manage
to get into low-income neighborhoods, low
poverty neighborhoods. That's really bad.
So, one of the factors that gets
criticized, and is a reason this may be
happening, is the way that HUD actually
sets payment standards for the voucher.
We use something called fair market
rents, or FMRs, and they 
are set at the metro level,
so that households can afford about 40% of
units in a metro area. But it's the same
payment standard across the metro area;
and in some metro areas, that FMR is not
high enough to get into good
neighborhoods, and all of those units -- the
40% of units -- are in very high poverty
neighborhoods. So, the idea that the HUD
staff came up with: what if we actually
have payment standards that vary at the
neighborhood level just like rents do?
You can use the ACS data --
so, now we have the American Community
Survey, so we have data on a more regular
basis at lower geography -- to set rents at
the zip code level. So that was the idea.
Before you go from an idea to a national
policy, you gather evidence. So, HUD
created a demonstration with the zip
code level FMRs -- payment standards -- in
five public housing agencies around the
country and even before that, through
court-mandated order in
Dallas. And the evidence from Dallas,
which has been doing this the longest, is
that voucher households are moving to
lower poverty, lower crime neighborhoods
at about the same cost, average cost. So,
we're serving the same number of
households. That evidence then went into
the policy design process.
The rule-making and policy 
design process in a federal
agency has many steps. First step, you
make an announcement to the public,
so that all stakeholders can engage and
give you their ideas. From those ideas, a
rule was actually designed -- went through
a final rule-making process that was
finalized on November 16th, which means
it was implemented formally on January 17th.
It was a two-year process to go
from the comments, and it is now the new
policy in a collection
of areas where vouchers are most
concentrated. So, I'm gonna end with just
a couple of reflections. I'm thinking
about the connection between research
and policy, and why we focused on this
for the last two years. The first is: the
change that we wanted to use is rule-making.
So, if you're at the end of a
Democratic administration with a
Republican-held Congress and Senate,
you're focusing on rule-making, not
legislation. That does not mean Congress
is not involved with rule-making.
Rule-making is hard. When you do not have
an addition in the budget, and you make a change,
somebody perceives, or is, losing.
Fixed budget --> changing something --> 
somebody loses.
Anybody who's gonna lose knows they're
gonna lose; they're identifiable. You know
what the current funding streams are;
they go through the public comment
period with you; they have an elected
official that they are going to be in
touch with; elected officials in Congress
are gonna be reaching out to the federal
agency. Those who are better off
may not even be identifiable. They don't show up
in the public comment period in the same
way, so even with the rule -- it had lots
of support -- it is a long and hard process.
What helps? I want to point out two
things that help. You need champions.
You need champions, external to the federal
agency, who are willing to engage in the
public comment period, and you need
champions inside the building. Every
federal agency has way too many
priorities to get done; not enough staff,
not enough money. Even without opposition,
things won't get done unless somebody is
continuously championing that, of the
five things that you want to get done
and the two that are left, "I want to get
my two on there." So, you need multiple
champions within the building. The career
staff who created the idea were on my team;
I was their champion. They convinced
the former secretary of HUD, Shaun
Donovan, that this was a great idea; he
became the champion. He convinced the
incoming and then secretary, Julián Castro, that 
it was a good idea. Multiple champions
moving it forward every step.
And the second was the research. We had
the research showing the effects in
Dallas. This was absolutely critical.
Every time we got to that list of five, I
could point to that research and say, "but
we know it works; we know that this is
going to make something better; and we
could say that OMB in the White House from
making sure it got through the process."
But the other piece of research was the Chetty research.
Research that you can
leverage from outside your organization,
in a policy window that opens up, is
critical for being able to have impact. And so,
we pride ourself, here at Wagner,
on training public servants who can be
in organizations, who can translate that
research, so that you can grab that
policy moment to actually have an impact.
So, I'm going to end there. Thank you for
coming, and I hope I get to talk to you later.
