Nate Baum Snow, University of Toronto

"The Long-Run Effects of Neighborhood Change on Incumbent Families"

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 skill-specific labor demand shocks hitting each residential urban census tract in the U.S. Our results indicate that children in sub- urban neighborhoods with a one standard deviation greater increase in the fraction of resident adults with a college degree experienced 0.4 to 0.7 standard deviations improvement in credit outcomes 12-17 years later. Since parental outcomes are not affected and inclusion of school district fixed effects nullify estimates, we interpret results as primarily driven by interactions in public schools.

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