IDEAS home Printed from https://ideas.repec.org/p/fip/fedhwp/wp-2019-02.html
   My bibliography  Save this paper

The Long-Run Effects of Neighborhood Change on Incumbent Families

Author

Listed:
  • Nathaniel Baum-Snow
  • Daniel Hartley
  • Kwan Ok Lee

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.

Suggested Citation

  • Nathaniel Baum-Snow & Daniel Hartley & Kwan Ok Lee, 2019. "The Long-Run Effects of Neighborhood Change on Incumbent Families," Working Paper Series WP-2019-2, Federal Reserve Bank of Chicago.
  • Handle: RePEc:fip:fedhwp:wp-2019-02
    DOI: 10.21033/wp-2019-02
    as

    Download full text from publisher

    File URL: https://www.chicagofed.org/~/media/publications/working-papers/2019/wp2019-02-pdf.pdf
    File Function: Full text
    Download Restriction: no

    File URL: https://libkey.io/10.21033/wp-2019-02?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. Dave Donaldson & Richard Hornbeck, 2016. "Railroads and American Economic Growth: A "Market Access" Approach," The Quarterly Journal of Economics, Oxford University Press, vol. 131(2), pages 799-858.
    2. 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.
    3. Gabriel M. Ahlfeldt & Stephen J. Redding & Daniel M. Sturm & Nikolaus Wolf, 2015. "The Economics of Density: Evidence From the Berlin Wall," Econometrica, Econometric Society, vol. 83, pages 2127-2189, November.
    4. Olof Åslund & Per-Anders Edin & Peter Fredriksson & Hans Grönqvist, 2011. "Peers, Neighborhoods, and Immigrant Student Achievement: Evidence from a Placement Policy," American Economic Journal: Applied Economics, American Economic Association, vol. 3(2), pages 67-95, April.
    5. Anna Piil Damm, 2009. "Ethnic Enclaves and Immigrant Labor Market Outcomes: Quasi-Experimental Evidence," Journal of Labor Economics, University of Chicago Press, vol. 27(2), pages 281-314, April.
    6. Fredrik Andersson & John C. Haltiwanger & Mark J. Kutzbach & Giordano Palloni & Henry O. Pollakowski & Daniel H. Weinberg, 2013. "Childhood Housing and Adult Earnings: A Between-Siblings Analysis of Housing Vouchers and Public Housing," Working Papers 13-48, Center for Economic Studies, U.S. Census Bureau.
    7. Joseph G. Altonji & Richard K. Mansfield, 2018. "Estimating Group Effects Using Averages of Observables to Control for Sorting on Unobservables: School and Neighborhood Effects," American Economic Review, American Economic Association, vol. 108(10), pages 2902-2946, October.
    8. 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.
    9. Hellerstein, Judith K. & Kutzbach, Mark J. & Neumark, David, 2014. "Do labor market networks have an important spatial dimension?," Journal of Urban Economics, Elsevier, vol. 79(C), pages 39-58.
    10. 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.
    11. Christopher Severen, 2023. "Commuting, Labor, and Housing Market Effects of Mass Transportation: Welfare and Identification," The Review of Economics and Statistics, MIT Press, vol. 105(5), pages 1073-1091, September.
    12. Per-Anders Edin & Peter Fredriksson & Olof Åslund, 2003. "Ethnic Enclaves and the Economic Success of Immigrants—Evidence from a Natural Experiment," The Quarterly Journal of Economics, Oxford University Press, vol. 118(1), pages 329-357.
    13. Paul Goldsmith-Pinkham & Isaac Sorkin & Henry Swift, 2020. "Bartik Instruments: What, When, Why, and How," American Economic Review, American Economic Association, vol. 110(8), pages 2586-2624, August.
    14. Judith K. Hellerstein & Melissa McInerney & David Neumark, 2011. "Neighbors and Coworkers: The Importance of Residential Labor Market Networks," Journal of Labor Economics, University of Chicago Press, vol. 29(4), pages 659-695.
    15. Kerwin Kofi Charles & Erik Hurst & Matthew J. Notowidigdo, 2018. "Housing Booms and Busts, Labor Market Opportunities, and College Attendance," American Economic Review, American Economic Association, vol. 108(10), pages 2947-2994, October.
    16. Eric D. Gould & Victor Lavy & M. Daniele Paserman, 2011. "Sixty Years after the Magic Carpet Ride: The Long-Run Effect of the Early Childhood Environment on Social and Economic Outcomes," Review of Economic Studies, Oxford University Press, vol. 78(3), pages 938-973.
    17. Raj Chetty & John N. Friedman & Nathaniel Hendren & Maggie R. Jones & Sonya R. Porter, 2018. "The Opportunity Atlas: Mapping the Childhood Roots of Social Mobility," Working Papers 18-42, Center for Economic Studies, U.S. Census Bureau.
    18. Victor Couture & Jessie Handbury, 2017. "Urban Revival in America, 2000 to 2010," NBER Working Papers 24084, National Bureau of Economic Research, Inc.
    19. Morales, Eduardo & Adao, Rodrigo & Kolesár, Michal, 2018. "Shift-Share Designs: Theory and Inference," CEPR Discussion Papers 13118, C.E.P.R. Discussion Papers.
    20. Rodrigo Adão & Michal Kolesár & Eduardo Morales, 2018. "Shift-Share Designs: Theory and Inference," NBER Working Papers 24944, National Bureau of Economic Research, Inc.
    21. Janet Currie & Lucas Davis & Michael Greenstone & Reed Walker, 2015. "Environmental Health Risks and Housing Values: Evidence from 1,600 Toxic Plant Openings and Closings," American Economic Review, American Economic Association, vol. 105(2), pages 678-709, February.
    22. Meltzer, Rachel & Ghorbani, Pooya, 2017. "Does gentrification increase employment opportunities in low-income neighborhoods?," Regional Science and Urban Economics, Elsevier, vol. 66(C), pages 52-73.
    23. 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.
    24. 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.
    25. Costas Arkolakis, 2016. "Optimal City Structure," 2016 Meeting Papers 301, Society for Economic Dynamics.
    26. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Manon Garrouste & Miren Lafourcade, 2022. "Place-Based Policies: Opportunity for Deprived Schools or Zone-and-Shame Effect?," Post-Print hal-04329793, HAL.
    2. Pankaj C. Patel & Cornelius A. Rietveld & Jack I. Richter, 2022. "The relation between public assistance and self-employment in census tracts: a long-term perspective," Journal of Evolutionary Economics, Springer, vol. 32(3), pages 891-927, July.
    3. Aliprantis, Dionissi & Martin, Hal & Phillips, David, 2022. "Landlords and access to opportunity," Journal of Urban Economics, Elsevier, vol. 129(C).
    4. 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.

    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. 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.
    2. 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.
    3. Baum-Snow, Nathaniel & Hartley, Daniel, 2020. "Accounting for central neighborhood change, 1980–2010," Journal of Urban Economics, Elsevier, vol. 117(C).
    4. 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.
    5. Longhi, Simonetta, 2017. "Spatial-Ethnic Inequalities: The Role of Location in the Estimation of Ethnic Wage Differentials," IZA Discussion Papers 11073, Institute of Labor Economics (IZA).
    6. Alexander M. Danzer & Carsten Feuerbaum & Marc Piopiunik & Ludger Woessmann, 2022. "Growing up in ethnic enclaves: language proficiency and educational attainment of immigrant children," Journal of Population Economics, Springer;European Society for Population Economics, vol. 35(3), pages 1297-1344, July.
    7. 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.
    8. Michele Battisti & Giovanni Peri & Agnese Romiti, 2022. "Dynamic Effects of Co-Ethnic Networks on Immigrants’ Economic Success," The Economic Journal, Royal Economic Society, vol. 132(641), pages 58-88.
    9. Simonetta Longhi, 2020. "Does geographical location matter for ethnic wage gaps?," Journal of Regional Science, Wiley Blackwell, vol. 60(3), pages 538-557, June.
    10. John C. Haltiwanger & Mark J. Kutzbach & Giordano Palloni & Henry O. Pollakowski & Matthew Staiger & Daniel H. Weinberg, 2020. "The Children of HOPE VI Demolitions: National Evidence on Labor Market Outcomes," Working Papers 20-39, Center for Economic Studies, U.S. Census Bureau.
    11. Jens Ruhose, 2015. "Microeconometric Analyses on Economic Consequences of Selective Migration," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 61, April.
    12. Deepti Goel & Kevin Lang, 2019. "Social Ties and the Job Search of Recent Immigrants," ILR Review, Cornell University, ILR School, vol. 72(2), pages 355-381, March.
    13. Johan Klaesson & Özge Öner & Dieter Pennerstorfer, 2023. "Do co-ethnic commuters disseminate labor market information? Evidence from geocoded register data," Economics working papers 2023-16, Department of Economics, Johannes Kepler University Linz, Austria.
    14. Del Bello, Carlo L. & Patacchini, Eleonora & Zenou, Yves, 2015. "Neighborhood Effects in Education," IZA Discussion Papers 8956, Institute of Labor Economics (IZA).
    15. Gobbi, Paula Eugenia & Chapelle, Guillaume & Domènech Arumí, Gerard, 2023. "Housing, Neighborhoods and Inequality," CEPR Discussion Papers 17969, C.E.P.R. Discussion Papers.
    16. Xiaohe Zhou & Mingda Cheng & Chunhui Ye, 2023. "The Impact of Household Migration on the Intergenerational Educational Mobility: Based on the Perspective of Adolescent Development," IJERPH, MDPI, vol. 20(6), pages 1-13, March.
    17. 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.
    18. Boje-Kovacs, Bence & Egsgaard-Pedersen, Aske & Weatherall, Cecilie D., 2021. "Residential mobility and persistent neighborhood deprivation," Journal of Housing Economics, Elsevier, vol. 53(C).
    19. Glitz, Albrecht, 2014. "Ethnic segregation in Germany," Labour Economics, Elsevier, vol. 29(C), pages 28-40.
    20. Joan Monras, 2020. "Immigration and Wage Dynamics: Evidence from the Mexican Peso Crisis," Journal of Political Economy, University of Chicago Press, vol. 128(8), pages 3017-3089.

    More about this item

    Keywords

    Employment; Neighborhoods; Human capital; Households; Population;
    All these keywords.

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:fip:fedhwp:wp-2019-02. 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: Lauren Wiese (email available below). General contact details of provider: https://edirc.repec.org/data/frbchus.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.