The Long-Run Effects of Neighborhood Change on Incumbent Families

Nathaniel Baum-Snow, Daniel Hartley and Kwan Ok Lee ()

No WP-2019-2, Working Paper Series from Federal Reserve Bank of Chicago

Abstract: A number of prominent studies examine the long-run effects of neighborhood attributes on children by leveraging variation in neighborhood exposure through household moves. However, much neighborhood change comes in place rather than through moving. Using an urban economic geography model as a basis, this paper estimates the causal effects of changes in neighborhood attributes on long-run outcomes for incumbent children and households. For identification, we make use of quasi-random variation in 1990-2000 and 2000-2005 skill specific labor demand shocks hitting each residential metro area census tract in the U.S. Our results indicate that children in suburban neighborhoods with a one standard deviation greater increase in the share of resident adults with a college degree experienced a 0.4 to 0.7 standard deviation improvement in credit outcomes 12-17 years later. Since parental outcomes are not affected, we interpret these results as operating through neighborhood effects. Finally, we provide evidence that most of the estimated effects operate through public schools.

Keywords: Employment; Neighborhoods; Human capital; Households; Population (search for similar items in EconPapers)
JEL-codes: D1 E24 R3 (search for similar items in EconPapers)
Pages: 77 pages
Date: 2019-03-18
New Economics Papers: this item is included in nep-geo, nep-mac, nep-sea and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Working Paper: The long-run effects of neighborhood change on incumbent families (2019)
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DOI: 10.21033/wp-2019-02

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