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The Impacts of Neighborhoods on Intergenerational Mobility II: County-Level Estimates

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  • Raj Chetty
  • Nathaniel Hendren

Abstract

We estimate the causal effect of each county in the United States on children’s incomes in adulthood. We first estimate a fixed effects model that is identified by analyzing families who move across counties with children of different ages. We then use these fixed effect estimates to (i) quantify how much places matter for intergenerational mobility, (ii) construct forecasts of the causal effect of growing up in each county that can be used to guide families seeking to move to opportunity, and (iii) characterize which types of areas produce better outcomes. For children growing up in low-income families, each year of childhood exposure to a one standard deviation (std. dev.) better county increases income in adulthood by 0.5%. There is substantial variation in counties’ causal effects even within metro areas. Counties with less concentrated poverty, less income inequality, better schools, a larger share of two-parent families, and lower crime rates tend to produce better outcomes for children in poor families. Boys’ outcomes vary more across areas than girls’ outcomes, and boys have especially negative outcomes in highly segregated areas. Areas that generate better outcomes have higher house prices on average, but our approach uncovers many “opportunity bargains”—places that generate good outcomes but are not very expensive.

Suggested Citation

  • Raj Chetty & Nathaniel Hendren, 2018. "The Impacts of Neighborhoods on Intergenerational Mobility II: County-Level Estimates," The Quarterly Journal of Economics, Oxford University Press, vol. 133(3), pages 1163-1228.
  • Handle: RePEc:oup:qjecon:v:133:y:2018:i:3:p:1163-1228.
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    File URL: http://hdl.handle.net/10.1093/qje/qjy006
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    1. Raj Chetty & Nathaniel Hendren & Frina Lin & Jeremy Majerovitz & Benjamin Scuderi, 2016. "Childhood Environment and Gender Gaps in Adulthood," American Economic Review, American Economic Association, vol. 106(5), pages 282-288, May.
    2. Raj Chetty & Nathaniel Hendren, 2018. "The Impacts of Neighborhoods on Intergenerational Mobility I: Childhood Exposure Effects," The Quarterly Journal of Economics, Oxford University Press, vol. 133(3), pages 1107-1162.
    3. Miles Corak, 2013. "Income Inequality, Equality of Opportunity, and Intergenerational Mobility," Journal of Economic Perspectives, American Economic Association, vol. 27(3), pages 79-102, Summer.
    4. Roland G. Fryer, Jr, 2010. "Racial Inequality in the 21st Century: The Declining Significance of Discrimination," NBER Working Papers 16256, National Bureau of Economic Research, Inc.
    5. Chetty, Nadarajan & Friedman, John & Rockoff, Jonah E., 2014. "Measuring the Impacts of Teachers I: Evaluating Bias in Teacher Value-Added Estimates," Scholarly Articles 30749073, Harvard University Department of Economics.
    6. 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.
    7. Raj Chetty & John N. Friedman & Jonah E. Rockoff, 2014. "Measuring the Impacts of Teachers I: Evaluating Bias in Teacher Value-Added Estimates," American Economic Review, American Economic Association, vol. 104(9), pages 2593-2632, September.
    8. David M. Cutler & Edward L. Glaeser, 1997. "Are Ghettos Good or Bad?," The Quarterly Journal of Economics, Oxford University Press, vol. 112(3), pages 827-872.
    9. Raj Chetty & Nathaniel Hendren & Patrick Kline & Emmanuel Saez, 2014. "Where is the land of Opportunity? The Geography of Intergenerational Mobility in the United States," The Quarterly Journal of Economics, Oxford University Press, vol. 129(4), pages 1553-1623.
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    JEL classification:

    • H0 - Public Economics - - General
    • J0 - Labor and Demographic Economics - - General
    • R0 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General

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