Identifying Long-Run Neighborhood Effects via Race-Based Neighborhood Sorting

Dionissi Aliprantis (), Daniel Hartley () and Chris Muris
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Dionissi Aliprantis: CERGIC - Center for Economic Research on Governance, Inequality and Conflict - ENS de Lyon - École normale supérieure de Lyon - Université de Lyon
Daniel Hartley: Federal Reserve Bank of Chicago

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Abstract: Children's adult outcomes are influenced by both their parents' socioeconomic status (SES) and the SES of the neighborhood where they grew up. We explicitly distinguish between these factors to identify long-run neighborhood effects. We estimate an ordered probit model of neighborhood choice and use it to infer how population shares of parental SES in each neighborhood vary along both observed and unobserved dimensions. We then regress the average observed outcomes in neighborhoods on these population shares to identify potential outcomes. Using racebased neighborhood sorting as an instrument, we estimate that about half of recent racial inequality in intergenerational mobility is explained by residential segregation.

Keywords: Neighborhood Effect; Neighborhood Sorting; Race; Intergenerational Mobility (search for similar items in EconPapers)
Date: 2025-03-03
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