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Evaluating Contradictory Experimental and Non-Experimental Estimates of Neighborhood Effects on Economic Outcomes for Adults

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... This resulted in an exogenous source of variation in location, and is linked with long-term improvements in outcomes for children who moved (Chetty, Hendren, and Katz 2016). That said, the effects were much smaller than observational differences in outcomes between children across neighborhoods (Harding et al. 2021). ...
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This chapter provides new evidence on educational inequality and reviews the literature on the causes and consequences of unequal education. We document large achievement gaps between children from different socio-economic backgrounds, show how patterns of educational inequality vary across countries, time, and generations, and establish a link between educational inequality and social mobility. We interpret this evidence from the perspective of economic models of skill acquisition and investment in human capital. The models account for different channels underlying unequal education and highlight how endogenous responses in parents' and children's educational investments generate a close link between economic inequality and educational inequality. Given concerns over the extended school closures during the Covid-19 pandemic, we also summarize early evidence on the impact of the pandemic on children's education and on possible long-run repercussions for educational inequality.
... For example, several studies have used non-experimental methods to study adult movers and found large effects on labor market outcomes (Fauth, Leventhal and Brooks-Gunn, 2004;Weinberg, Reagan and Yankow, 2004;Clampet-Lundquist and Massey, 2008). Although selection bias is not the only explanation for the discrepancy between earlier observational studies and more recent work based on experiments and plausible quasi-experiments, Harding et al. (2021) provide evidence suggesting that selection bias plays a large role in driving the findings of traditional non-experimental studies of neighborhood effects on adult economic outcomes. ...
... For example, several studies have used non-experimental methods to study adult movers and found large effects on labor market outcomes (Fauth, Leventhal, and Brooks-Gunn 2004;Weinberg, Reagan, and Yankow 2004;Clampet-Lundquist and Massey 2008). Although selection bias is not the only explanation for the discrepancy between earlier observational studies and more recent work based on experiments and plausible quasi-experiments, Harding et al. (2021) provide evidence suggesting that selection bias plays a large role in driving the findings of traditional non-experimental studies of neighborhood effects on adult economic outcomes. ...
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Do places make a difference to people's health and well-being? This book demonstrates how the physical and social characteristics of a neighborhood can shape the health of its residents. Researchers have long suspected that where one lives makes a difference to health in addition to who one is. Almost everyone understands that smoking, unhealthy eating, lack of exercise can compromise longevity and good health, but can a person's ability to maintain a healthy lifestyle be affected by the smoking habits of other people close by, or access to grocery stores, or the existence of safe parks and recreational space? The answers to this question and other similar ones require new ways of thinking about the determinants of health as well as new analytical methods to test these ideas. This book brings together these ideas and new methods. The book contains various parts. The first part deals with methodological complexities of undertaking neighborhood research. The second part showcases the empirical evidence linking neighborhood conditions to health outcomes. The last part tackles some of the major cross-cutting themes in contemporary neighborhood research.
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The Moving to Opportunity (MTO) housing experiment has proven to be an important intervention not just in the lives of the poor, but in social science theories of neighborhood effects. Competing causal claims have been the subject of considerable disagreement, culminating in the debate between Clampet-Lundquist and Massey (2008) and Ludwig et al. (2008). This paper assesses the debate by clarifying analytically distinct questions posed by neighborhood-level theories, reconceptualizing selection bias as a fundamental social process worthy of study in its own right rather than as a statistical nuisance, and reconsidering the scientific method of experimentation, and hence causality, in the social world of the city. I also analyze MTO and independent survey data from Chicago to examine trajectories of residential attainment. Although MTO provides crucial leverage for estimating neighborhood effects on individuals, as proponents rightly claim, I demonstrate the implications imposed by a stratified urban structure and how MTO simultaneously provides a new window on the social reproduction of concentrated inequality.
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The Moving to Opportunity (MTO) for Fair Housing demonstration provided an opportunity for low-income renters to move to low-poverty neighborhoods. Many of these renters, however, did not move with their vouchers, and many of those who moved did not stay in low-poverty neighborhoods. In this article, we explore the mechanisms behind these residential outcomes and what they mean for housing policy. First, we review evidence suggesting that MTO families wanted to live in low-poverty "opportunity areas." We then describe how some aspects of the Housing Choice Voucher Program, the structural features of the housing market, and the beliefs and coping mechanisms of low-income renters — shaped by years of living in extreme poverty — prevented these families from achieving their goals of residential mobility. Finally, we consider the negative consequences on the life chances of the poor if housing policy does not address constraints to mobility and identify potential policy solutions that might lead to opportunities for low-income renters to live in low-poverty neighborhoods.
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This article examines the impact of neighborhood welfare participation on individual welfare participation, that is, the endogenous neighborhood effects. Endogenous neighborhood effects generate social multipliers. Few existing empirical studies on neighborhood effects distinguish between endogenous neighborhood effects and exogenous neighborhood effects, that is, the effects of neighborhood characteristics. This article constitutes an early attempt to identify and estimate endogenous and exogenous neighborhood effects separately. I construct an instrumental variable for neighborhood welfare participation rate based on the variation in welfare benefits and neighborhood demographic composition to address the reflection problem and the omitted neighborhood variables problem. A two-step method is proposed to separately estimate endogenous and exogenous neighborhood effects. The results show that neighborhood welfare participation plays an important role in a woman’s welfare participation both before and after the welfare reform in 1996.
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Individuals participating in the HUD Housing Choice Voucher program, formerly Section 8, can rent units in the private market and are not tied to public housing projects in a specific neighborhood. We would expect vouchers to help poor families leave the ghetto and move to more diverse communities with higher socioeconomic opportunity, but many voucher holders remain concentrated in poor, segregated communities. We use longitudinal qualitative data from one hundred low-income African American families in Mobile, Alabama, to explore this phenomenon, finding that tenants’ limited housing search resources, involuntary mobility, landlord practices, and several aspects of the voucher program itself limit families’ ability to escape disadvantaged areas. We also find that the voucher program’s regulations and funding structures do not incentivize housing authorities to promote neighborhood mobility and residential choice. This combination of forces often keeps voucher recipients in neighborhoods with high concentrations of poor and minority residents.
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The ability of nonexperimental estimators to match impact estimates derived from random assignment is examined using data from the evaluation of two interdistrict magnet schools. As in previous within-study comparisons, nonexperimental estimates differ from estimates based on random assignment when nonexperimental estimators are implemented without pretreatment measures of academic performance. With comparison groups consisting of students drawn from the same districts or districts with similar student body characteristics as the districts where treatment group students reside, using pretreatment test scores reduces the bias in nonexperimental methods between 64 and 96 percent. Adding pretreatment test scores does not achieve as much bias reduction when the comparison group consists of students drawn from districts with different student body characteristics than the treatment group students’ districts. The results suggest that using pretreatment outcome measures and comparison groups that are geographically aligned with the treatment group greatly improves the performance of nonexperimental estimators. © 2012 by the Association for Public Policy Analysis and Management.
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The abstract for this document is available on CSA Illumina.To view the Abstract, click the Abstract button above the document title.
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According to a cohesiveness perspective, neighborhood stability is good for communities and the individuals who live in them, and may be especially beneficial in poor neighborhoods. In contrast, a social isolation perspective proposes that neighborhood stability has negative effects on residents' psychological well-being in economically disadvantaged neighborhoods. This analysis of multilevel data-data in which survey information from a representative sample of Illinois residents is linked to census-tract information about poverty and stability in their neighborhood-supports a social isolation perspective. In affluent neighborhoods, stability is associated with low levels of distress; under conditions of poverty the opposite is true. In part this occurs because residents of poor, stable neighborhoods face high levels of disorder in their neighborhoods. Stability does not reduce perceived disorder under conditions of poverty, as it does in more affluent neighborhoods, which leaves residents feeling powerless to leave a dangerous place. Finally, the negative effects of poor, stable neighborhoods on residents' psychological well-being do not stem from a lack of social ties among neighbors.
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This study uses within-study comparisons to assess the relative importance of covariate choice, unreliability in the measurement of these covariates, and whether regression or various forms of propensity score analysis are used to analyze the outcome data. Two of the within-study comparisons are of the four-arm type, and many more are of the three-arm type. To examine unreliability, simulations of differences in reliability are deliberately introduced into the 2 four-arm studies. Results are similar across the samples of studies reviewed with their wide range of non-experimental designs and topic areas. Covariate choice counts most, unreliability next most, and the mode of data analysis hardly matters at all. Unreliability has larger effects the more important a covariate is for bias reduction, but even so the very best covariates measured with a reliability of only .60 still do better than substantively poor covariates that are measured perfectly. Why regression methods do as well as propensity score methods used in several different ways is a mystery still because, in theory, propensity scores would seem to have a distinct advantage in many practical applications, especially those where functional forms are in doubt.
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Cutler and Glaeser (1997) show that urban residential segregation has a strong adverse effect on labor market and social outcomes of young African-Americans relative to whites. We show that this effect is a fairly recent historical phenomenon. There is little evidence of such an effect from 1940 to 1970; rather, it emerged between 1970 and 1980, and it grew stronger during the 1980s.
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Using multilevel data, I find that residents of poor, mother-only neighborhoods have higher levels of depression than residents of more advantaged neighborhoods. My data are from the 1995 Community, Crime and Health survey, a prob-ability sample of 2,482 adults in Illinois with linked information about the respondents ' census tract. Adjustment for individual-level race, ethnicity, sex, age, education, employment, income, household structure, and urban residence indicates that more than half of apparent contextual effect is really compositional, due to the fact that residents of disadvantaged neighborhoods tend to be disadvantaged themselves; however, a significant contextual effect survives. All of the distressing effects of female headship and poverty in the neighborhood are mediated by perceived neighborhood disorder. The daily stress of living in a neighborhood where social order has broken down is associated with depression.