IDEAS home Printed from https://ideas.repec.org/a/aea/jecper/v35y2021i4p197-222.html
   My bibliography  Save this article

Neighborhoods Matter: Assessing the Evidence for Place Effects

Author

Listed:
  • Eric Chyn
  • Lawrence F. Katz

Abstract

How does one's place of residence affect individual behavior and long-run outcomes? Understanding neighborhood and place effects has been a leading question for social scientists during the past half-century. Recent empirical studies using experimental and quasi-experimental research designs have generated new insights on the importance of residential neighborhoods in childhood and adulthood. This paper summarizes the recent neighborhood effects literature and interprets the findings. Childhood neighborhoods affect long-run economic and educational outcomes in a manner consistent with exposure models of neighborhood effects. For adults, neighborhood environments matter for their health and well-being but have more ambiguous impacts on labor market outcomes. We discuss the evidence on the mechanisms behind the observed patterns and conclude by highlighting directions for future research.

Suggested Citation

  • Eric Chyn & Lawrence F. Katz, 2021. "Neighborhoods Matter: Assessing the Evidence for Place Effects," Journal of Economic Perspectives, American Economic Association, vol. 35(4), pages 197-222, Fall.
    • Handle: RePEc:aea:jecper:v:35:y:2021:i:4:p:197-222
    DOI: 10.1257/jep.35.4.197
    as

    Download full text from publisher

    File URL: https://www.aeaweb.org/doi/10.1257/jep.35.4.197
    Download Restriction: no
    File URL: https://doi.org/10.3886/E142621V1
    Download Restriction: no
    File URL: https://www.aeaweb.org/doi/10.1257/jep.35.4.197.appx
    Download Restriction: no
    File URL: https://www.aeaweb.org/doi/10.1257/jep.35.4.197.ds
    Download Restriction: no
    File URL: https://libkey.io/10.1257/jep.35.4.197?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Brian A. Jacob, 2004. "Public Housing, Housing Vouchers, and Student Achievement: Evidence from Public Housing Demolitions in Chicago," American Economic Review, American Economic Association, vol. 94(1), pages 233-258, March.
    2. Adam Isen & Maya Rossin-Slater & W. Reed Walker, 2017. "Every Breath You Take—Every Dollar You’ll Make: The Long-Term Consequences of the Clean Air Act of 1970," Journal of Political Economy, University of Chicago Press, vol. 125(3), pages 848-902.
    3. Justine S. Hastings & Jeffrey M. Weinstein, 2008. "Information, School Choice, and Academic Achievement: Evidence from Two Experiments," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 123(4), pages 1373-1414.
    4. Cavit Baran & Eric Chyn & Bryan A. Stuart, 2022. "The Great Migration and Educational Opportunity," Upjohn Working Papers 22-367, W.E. Upjohn Institute for Employment Research.
    5. James J. Heckman & Stefano Mosso, 2014. "The Economics of Human Development and Social Mobility," Annual Review of Economics, Annual Reviews, vol. 6(1), pages 689-733, August.
    6. Rebecca Diamond & Tim McQuade, 2019. "Who Wants Affordable Housing in Their Backyard? An Equilibrium Analysis of Low-Income Property Development," Journal of Political Economy, University of Chicago Press, vol. 127(3), pages 1063-1117.
    7. Eric Chyn, 2018. "Moved to Opportunity: The Long-Run Effects of Public Housing Demolition on Children," American Economic Review, American Economic Association, vol. 108(10), pages 3028-3056, October.
    8. Leah Platt Boustan, 2016. "Introduction to "Competition in the Promised Land: Black Migrants in Northern Cities and Labor Markets"," NBER Chapters, in: Competition in the Promised Land: Black Migrants in Northern Cities and Labor Markets, pages 1-13, National Bureau of Economic Research, Inc.
    9. Bryan S. Graham, 2018. "Identifying and Estimating Neighborhood Effects," Journal of Economic Literature, American Economic Association, vol. 56(2), pages 450-500, June.
    10. Lawrence F. Katz & Jonathan Roth & Richard Hendra & Kelsey Schaberg, 2022. "Why Do Sectoral Employment Programs Work? Lessons from WorkAdvance," Journal of Labor Economics, University of Chicago Press, vol. 40(S1), pages 249-291.
    11. Ran Abramitzky & Leah Platt Boustan & Katherine Eriksson, 2012. "Europe's Tired, Poor, Huddled Masses: Self-Selection and Economic Outcomes in the Age of Mass Migration," American Economic Review, American Economic Association, vol. 102(5), pages 1832-1856, August.
    12. Harry J. Holzer & John M. Quigley & Steven Raphael, 2003. "Public transit and the spatial distribution of minority employment: Evidence from a natural experiment," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 22(3), pages 415-441.
    13. Sharon Barnhardt & Erica Field & Rohini Pande, 2017. "Moving to Opportunity or Isolation? Network Effects of a Randomized Housing Lottery in Urban India," American Economic Journal: Applied Economics, American Economic Association, vol. 9(1), pages 1-32, January.
    14. Timothy J. Bartik, 2020. "Using Place-Based Jobs Policies to Help Distressed Communities," Journal of Economic Perspectives, American Economic Association, vol. 34(3), pages 99-127, Summer.
    15. Charles F. Manski, 1993. "Identification of Endogenous Social Effects: The Reflection Problem," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 60(3), pages 531-542.
    16. David H. Autor & David Dorn & Gordon H. Hanson, 2013. "The China Syndrome: Local Labor Market Effects of Import Competition in the United States," American Economic Review, American Economic Association, vol. 103(6), pages 2121-2168, October.
    17. Michael A. Clemens, 2013. "Why Do Programmers Earn More in Houston Than Hyderabad? Evidence from Randomized Processing of US Visas," American Economic Review, American Economic Association, vol. 103(3), pages 198-202, May.
    18. Morris Davis & Daniel Hartley & Jesse Gregory, 2019. "The Long-Run Effects of Low-Income Housing on Neighborhood Composition," 2019 Meeting Papers 70, Society for Economic Dynamics.
    19. Anna Aizer & Janet Currie, 2019. "Lead and Juvenile Delinquency: New Evidence from Linked Birth, School, and Juvenile Detention Records," The Review of Economics and Statistics, MIT Press, vol. 101(4), pages 575-587, October.
    20. Stefanie DeLuca & Peter Rosenblatt, 2017. "Walking Away From : Housing Mobility and Neighborhood Opportunity in Baltimore," Housing Policy Debate, Taylor & Francis Journals, vol. 27(4), pages 519-546, July.
    21. Votruba, Mark Edward & Kling, Jeffrey R., 2009. "Effects of neighborhood characteristics on the mortality of black male youth: Evidence from Gautreaux, Chicago," Social Science & Medicine, Elsevier, vol. 68(5), pages 814-823, March.
    22. Raj Chetty & Nathaniel Hendren & Maggie R Jones & Sonya R Porter, 2020. "Race and Economic Opportunity in the United States: an Intergenerational Perspective [“Intergenerational Mobility of Immigrants in the US Over Two Centuries,”]," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 135(2), pages 711-783.
    23. David McKenzie & John Gibson & Steven Stillman, 2010. "How Important Is Selection? Experimental vs. Non-Experimental Measures of the Income Gains from Migration," Journal of the European Economic Association, MIT Press, vol. 8(4), pages 913-945, June.
    24. Desmond Ang, 2021. "The Effects of Police Violence on Inner-City Students," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 136(1), pages 115-168.
    25. Matias Busso & Jesse Gregory & Patrick Kline, 2013. "Assessing the Incidence and Efficiency of a Prominent Place Based Policy," American Economic Review, American Economic Association, vol. 103(2), pages 897-947, April.
    26. Lawrence F. Katz & Jeffrey R. Kling & Jeffrey B. Liebman, 2001. "Moving to Opportunity in Boston: Early Results of a Randomized Mobility Experiment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(2), pages 607-654.
    27. Kenneth Y. Chay & Michael Greenstone, 2003. "The Impact of Air Pollution on Infant Mortality: Evidence from Geographic Variation in Pollution Shocks Induced by a Recession," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(3), pages 1121-1167.
    28. Heather L. Schwartz & Kata Mihaly & Breann Gala, 2017. "Encouraging Residential Moves to Opportunity Neighborhoods: An Experiment Testing Incentives Offered to Housing Voucher Recipients," Housing Policy Debate, Taylor & Francis Journals, vol. 27(2), pages 230-260, March.
    29. Nathan Deutscher, 2020. "Place, Peers, and the Teenage Years: Long-Run Neighborhood Effects in Australia," American Economic Journal: Applied Economics, American Economic Association, vol. 12(2), pages 220-249, April.
    30. Philip Oreopoulos, 2003. "The Long-Run Consequences of Living in a Poor Neighborhood," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(4), pages 1533-1575.
    31. Leonardo Bursztyn & Florian Ederer & Bruno Ferman & Noam Yuchtman, 2014. "Understanding Mechanisms Underlying Peer Effects: Evidence From a Field Experiment on Financial Decisions," Econometrica, Econometric Society, vol. 82(4), pages 1273-1301, July.
    32. Anna Piil Damm & Christian Dustmann, 2014. "Does Growing Up in a High Crime Neighborhood Affect Youth Criminal Behavior?," American Economic Review, American Economic Association, vol. 104(6), pages 1806-1832, June.
    33. Stefanie DeLuca & Greg J. Duncan & Micere Keels & Ruby M. Mendenhall, 2010. "Gautreaux mothers and their children: an update," Housing Policy Debate, Taylor & Francis Journals, vol. 20(1), pages 7-25, January.
    34. Leah Platt Boustan, 2016. "Competition in Northern Labor Markets," NBER Chapters, in: Competition in the Promised Land: Black Migrants in Northern Cities and Labor Markets, pages 65-92, National Bureau of Economic Research, Inc.
    35. Janna E. Johnson & Evan J. Taylor, 2019. "The long run health consequences of rural‐urban migration," Quantitative Economics, Econometric Society, vol. 10(2), pages 565-606, May.
    36. John C. Haltiwanger & Mark J. Kutzbach & Giordano E. Palloni & Henry Pollakowski & Matthew Staiger & Daniel Weinberg, 2020. "The Children of HOPE VI Demolitions: National Evidence on Labor Market Outcomes," NBER Working Papers 28157, National Bureau of Economic Research, Inc.
    37. Sean F. Reardon & Kendra Bischoff & Ann Owens & Joseph B. Townsend, 2018. "Has Income Segregation Really Increased? Bias and Bias Correction in Sample-Based Segregation Estimates," Demography, Springer;Population Association of America (PAA), vol. 55(6), pages 2129-2160, December.
    38. Raj Chetty & Nathaniel Hendren & Lawrence F. Katz, 2016. "The Effects of Exposure to Better Neighborhoods on Children: New Evidence from the Moving to Opportunity Experiment," American Economic Review, American Economic Association, vol. 106(4), pages 855-902, April.
    39. C. Kirabo Jackson & Rucker C. Johnson & Claudia Persico, 2016. "The Effects of School Spending on Educational and Economic Outcomes: Evidence from School Finance Reforms," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 131(1), pages 157-218.
    40. Janet Currie & Reed Walker, 2011. "Traffic Congestion and Infant Health: Evidence from E-ZPass," American Economic Journal: Applied Economics, American Economic Association, vol. 3(1), pages 65-90, January.
    41. Sebastian Galiani & Alvin Murphy & Juan Pantano, 2015. "Estimating Neighborhood Choice Models: Lessons from a Housing Assistance Experiment," American Economic Review, American Economic Association, vol. 105(11), pages 3385-3415, November.
    42. Tatyana Deryugina & Laura Kawano & Steven Levitt, 2018. "The Economic Impact of Hurricane Katrina on Its Victims: Evidence from Individual Tax Returns," American Economic Journal: Applied Economics, American Economic Association, vol. 10(2), pages 202-233, April.
    43. Tatyana Deryugina & David Molitor, 2020. "Does When You Die Depend on Where You Live? Evidence from Hurricane Katrina," American Economic Review, American Economic Association, vol. 110(11), pages 3602-3633, November.
    44. C. Kirabo Jackson, 2018. "What Do Test Scores Miss? The Importance of Teacher Effects on Non–Test Score Outcomes," Journal of Political Economy, University of Chicago Press, vol. 126(5), pages 2072-2107.
    45. Danny Yagan, 2019. "Employment Hysteresis from the Great Recession," Journal of Political Economy, University of Chicago Press, vol. 127(5), pages 2505-2558.
    46. Esther Duflo & Emmanuel Saez, 2003. "The Role of Information and Social Interactions in Retirement Plan Decisions: Evidence from a Randomized Experiment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(3), pages 815-842.
    47. Susan J. Popkin & James E. Rosenbaum & Patricia M. Meaden, 1993. "Labor market experiences of low-income black women in middle-class suburbs: Evidence from a survey of gautreaux program participants," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 12(3), pages 556-573.
    48. William J. Collins & Marianne H. Wanamaker, 2014. "Selection and Economic Gains in the Great Migration of African Americans: New Evidence from Linked Census Data," American Economic Journal: Applied Economics, American Economic Association, vol. 6(1), pages 220-252, January.
    49. Robert Collinson & Peter Ganong, 2018. "How Do Changes in Housing Voucher Design Affect Rent and Neighborhood Quality?," American Economic Journal: Economic Policy, American Economic Association, vol. 10(2), pages 62-89, May.
    50. Leah Platt Boustan, 2016. "Competition in the Promised Land: Black Migrants in Northern Cities and Labor Markets," NBER Books, National Bureau of Economic Research, Inc, number bous-2, July.
    51. Robert Collinson & Ingrid Gould Ellen & Jens Ludwig, 2015. "Low-Income Housing Policy," NBER Chapters, in: Economics of Means-Tested Transfer Programs in the United States, Volume 2, pages 59-126, National Bureau of Economic Research, Inc.
    52. Ludwig, Jens & Duncan, Greg J. & Katz, Lawrence F. & Kessler, Ronald & Kling, Jeffrey R. & Gennetian, Lisa A. & Sanbonmatsu, Lisa, 2012. "Neighborhood Effects on the Long-Term Well-Being of Low-Income Adults," Scholarly Articles 11870359, Harvard University Department of Economics.
    53. Jennifer A. Heissel & Claudia Persico & David Simon, 2022. "Does Pollution Drive Achievement? The Effect of Traffic Pollution on Academic Performance," Journal of Human Resources, University of Wisconsin Press, vol. 57(3), pages 747-776.
    54. Hilary Hoynes & Douglas L. Miller & Jessamyn Schaller, 2012. "Who Suffers during Recessions?," Journal of Economic Perspectives, American Economic Association, vol. 26(3), pages 27-48, Summer.
    55. C. Kirabo Jackson & Claire Mackevicius, 2021. "The Distribution of School Spending Impacts," NBER Working Papers 28517, National Bureau of Economic Research, Inc.
    56. Edgar O. Olsen, 2000. "The Cost-Effectiveness of Alternative Methods of Delivering Housing Subsidies," Virginia Economics Online Papers 351, University of Virginia, Department of Economics.
    57. John F. Kain, 1968. "Housing Segregation, Negro Employment, and Metropolitan Decentralization," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 82(2), pages 175-197.
    58. Hugo Priemus & Peter Kemp & David Varady, 2005. "Housing vouchers in the United States, great Britain, and the Netherlands: Current issues and future perspectives," Housing Policy Debate, Taylor & Francis Journals, vol. 16(3-4), pages 575-609.
    59. Gilles Duranton & J. V. Henderson & William C. Strange (ed.), 2015. "Handbook of Regional and Urban Economics," Handbook of Regional and Urban Economics, Elsevier, edition 1, volume 5, number 5.
    60. Bruce A. Weinberg & Patricia B. Reagan & Jeffrey J. Yankow, 2004. "Do Neighborhoods Affect Hours Worked? Evidence from Longitudinal Data," Journal of Labor Economics, University of Chicago Press, vol. 22(4), pages 891-924, October.
    61. Jean-William Laliberté, 2021. "Long-Term Contextual Effects in Education: Schools and Neighborhoods," American Economic Journal: Economic Policy, American Economic Association, vol. 13(2), pages 336-377, May.
    62. Harry J. Holzer, 1991. "The Spatial Mismatch Hypothesis: What Has the Evidence Shown?," Urban Studies, Urban Studies Journal Limited, vol. 28(1), pages 105-122, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dionissi Aliprantis & Kristen Tauber & Hal Martin, 2022. "What Determines the Success of Housing Mobility Programs?," Working Papers 2022-043, Human Capital and Economic Opportunity Working Group.
    2. Gobbi, Paula Eugenia & Chapelle, Guillaume & Domènech Arumí, Gerard, 2023. "Housing, Neighborhoods and Inequality," CEPR Discussion Papers 17969, C.E.P.R. Discussion Papers.
    3. Jeffrey R. Kling & Jeffrey B. Liebman & Lawrence F. Katz & Lisa Sanbonmatsu, 2004. "Moving to Opportunity and Tranquility: Neighborhood Effects on Adult Economic Self-Sufficiency and Health From a Randomized Housing Voucher Experiment," Working Papers 5, Princeton University, Department of Economics, Industrial Relations Section..
    4. David J. Harding & Lisa Sanbonmatsu & Greg J. Duncan & Lisa A. Gennetian & Lawrence F. Katz & Ronald C. Kessler & Jeffrey R. Kling & Matthew Sciandra & Jens Ludwig, 2023. "Evaluating Contradictory Experimental and Nonexperimental Estimates of Neighborhood Effects on Economic Outcomes for Adults," Housing Policy Debate, Taylor & Francis Journals, vol. 33(2), pages 453-486, March.
    5. Cassidy, Michael T., 2020. "A Closer Look: Proximity Boosts Homeless Student Performance in New York City," IZA Discussion Papers 13558, Institute of Labor Economics (IZA).
    6. Cody Cook & Pearl Z. Li & Ariel J. Binder, 2023. "Where to Build Affordable Housing? Evaluating the Tradeoffs of Location," Working Papers 23-62, Center for Economic Studies, U.S. Census Bureau.
    7. Patrick Bayer & Stephen L. Ross, 2006. "Identifying Individual and Group Effects in the Presence of Sorting: A Neighborhood Effects Application," Working papers 2006-13, University of Connecticut, Department of Economics, revised Jan 2009.
    8. John A. List & Fatemeh Momeni & Yves Zenou, 2020. "The Social Side of Early Human Capital Formation: Using a Field Experiment to Estimate the Causal Impact of Neighborhoods," Working Papers 2020-187, Becker Friedman Institute for Research In Economics.
    9. Patrick Bayer & Stephen L. Ross & Giorgio Topa, 2008. "Place of Work and Place of Residence: Informal Hiring Networks and Labor Market Outcomes," Journal of Political Economy, University of Chicago Press, vol. 116(6), pages 1150-1196, December.
    10. Aliprantis, Dionissi & Martin, Hal & Phillips, David, 2022. "Landlords and access to opportunity," Journal of Urban Economics, Elsevier, vol. 129(C).
    11. List, John A. & Momeni, Fatemeh & Zenou, Yves, 2019. "Are Estimates of Early Education Programs Too Pessimistic? Evidence from a Large-Scale Field Experiment that Causally Measures Neighbor Effects," Working Paper Series 1293, Research Institute of Industrial Economics.
    12. Zenou, Yves & List, John & Momeni, Fatemeh, 2019. "Are Estimates of Early Education Programs Too Pessimistic? Evidence from a Large-Scale Field Experiment that Causally Measures," CEPR Discussion Papers 13725, C.E.P.R. Discussion Papers.
    13. Jipeng Zhang & Lue Zhan & Chong Lu, 2020. "The long-run effects of poverty alleviation resettlement on child development: Evidence from a quasi-experiment in China," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 43(10), pages 245-284.
    14. Topa, Giorgio & Zenou, Yves, 2015. "Neighborhood and Network Effects," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 561-624, Elsevier.
    15. Boje-Kovacs, Bence & Greve, Jane & Weatherall, Cecilie Dohlmann, 2018. "Can a shift of neighborhoods affect mental health? Evidence from a quasi-random allocation of applicants in the public social housing system," MPRA Paper 88929, University Library of Munich, Germany.
    16. Bence Boje-Kovacs & Jane Greve & Cecilie D. Weatherall, 2023. "Neighborhoods and mental health—evidence from a natural experiment in the public social housing sector," Journal of Population Economics, Springer;European Society for Population Economics, vol. 36(2), pages 911-934, April.
    17. Christian A. L. Hilber & Olivier Schoni, 2022. "Housing policy and affordable housing," CEP Occasional Papers 56, Centre for Economic Performance, LSE.
    18. John A. List & Fatemeh Momeni & Yves Zenou, 2020. "The Social Side of Early Human Capital Formation: Using a Field Experiment to Estimate the Causal Impact of Neighborhoods," Working Papers 2020-187, Becker Friedman Institute for Research In Economics.
    19. Barbara Broadway & Anna Zhu, 2023. "Spatial heterogeneity in welfare reform success," Melbourne Institute Working Paper Series wp2023n13, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    20. Bryan A. Stuart, 2022. "The Long-Run Effects of Recessions on Education and Income," American Economic Journal: Applied Economics, American Economic Association, vol. 14(1), pages 42-74, January.

    More about this item

    JEL classification:

    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:jecper:v:35:y:2021:i:4:p:197-222. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael P. Albert (email available below). General contact details of provider: https://edirc.repec.org/data/aeaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.