America’s era of big public housing projects was a grand experiment whose period of favor was remarkably short-lived.

The austere, often high-rise complexes rose across US cities in a few decades, mostly from the 1930s to 1960s. But as they became marooned by chronic disrepair and concentrated poverty, the political consensus to tear them down formed just as quickly. By 1992, Congress had created the HOPE VI program, which provided funding to demolish many distressed public housing buildings in cities across the US and replace them with new, mixed-income developments.

These newer neighborhoods have been made up of a mix of public housing, subsidized housing, and market-rate units, often consisting of low-rise townhomes and smaller apartment buildings that were much more integrated into surrounding city street grids. It was a “dramatic turnaround” in US housing policy, as a report from the Urban Institute, a social and economic policy think tank, put it. It also drew a chorus of opposition at the time, from those who feared — not entirely incorrectly — that residents would be displaced and not all demolished housing units would be replaced.

To understand how that policy shift has impacted the lives of families in the intervening decades, a team of scholars, including Harvard economist Raj Chetty, known for his field-defining work on the drivers of economic mobility in the US, looked at some 200 housing projects revitalized under HOPE VI in cities across the US — from Atlanta to Seattle to El Paso. They found that HOPE VI dramatically increased the future earnings of low-income children who grew up in the rebuilt neighborhoods — crucially by allowing them to form friendships with more affluent children. The findings are reported in a recent working paper published by the National Bureau of Economic Research.

That cross-class integration greatly benefits poor kids may not sound like a surprising discovery. Children are sponges for the expectations and examples that surround them, exquisitely sensitive to what the world trains them to believe is possible. But Chetty and his co-authors show these effects in housing projects with........

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