Social Interactions within Cities: Neighborhood Environments and Peer Relationships

Cities and their surrounding suburbs provide the homes, workplaces, and social and educational environments for most individuals and families in developed nations, but these urban areas are typically characterized by substantial stratification across racial, ethnic, and economic groups and associated with substantial levels of inequality. This chapter will examine our knowledge concerning the impact such stratification has on individual outcomes especially through its influence on the social interactions that occur within neighborhoods, schools, workplaces, and other institutions. The largest challenge faced in understanding the causal impact of social interactions arises from the fact that stratification is not an outside event, but rather is the result of individuals making choices that involve segregating themselves from others that differ in some way. The extent to which an individual makes segregating choices is invariably related to that individual's specific opportunities and therefore highly correlated with unobservables that drive that individual's success and life outcomes. Accordingly, the chapter will focus heavily on approaches for obtaining causal estimates of the effect of social interactions and evidence that arises from studies that have a convincing strategy for identifying these causal effects.