We study how households choose neighborhoods, how neighborhoods affect child ability, and how housing vouchers influence neighborhood choices and child outcomes. We use two new panel data sets with tract-level detail for Los Angeles County to estimate a dynamic model of optimal location choice for renting households and, separately, the impact of living in a given tract on child test scores, a proxy for child ability. We simulate optimal location choices and the resulting changes in child ability of the poorest households in our sample under various housing-voucher policies that incentivize households to relocate to tracts that beneficially impact child ability. When vouchers are restricted such that they can only be applied to units in the top 5% of tracts based on tract impact on child ability, we compute an “optimal" voucher amount of $300 per month where the benefits to child ability net of voucher costs are maximized. We also compute a “break-even" voucher amount of $700 per month in which benefits are equal to costs.