The neighbourhood is not what it used to be
Raaum, Oddbjørn, Kjell G. Salvanes and Erik Ø. Sørensen
Parents in fence their children's adult outcomes through economic and genetic endowments, transmission of cultural values and social skills, and through choice of residential location. Using a variance decomposition framework which provides bounds on the eect of families and neighbourhoods, we nd important eects of family characteristics as well as residential location on educational attainment and adult earnings in Norway. Families are more important than neighbourhoods as the correlations among siblings are signicantly higher than among children growing up in the same local community. Sibling correlations are estimated to be a little lower than for the US, while correlations between neighbourhood children in Norway are found to be signicantly weaker than in the US. Unlike previous studies, we also assess changes over time by studying children growing up around 1960 and 1970. While family eects are permanent over time, the impact of neighbourhoods is reduced by half in size from 1960 to 1970 and we link this result to several policy changes in the 1960s aimed at increasing equality of opportunity in Norway. Our results dier from previous US studies, suggesting that the role of families and neighbourhoods in explaining the degree of equality of opportunity and social mobility depends on labour market institutions and redistributive policies.
I21, J13, R23
Education, Children, Neighbours, Siblings, Local Institutions, Peer-effects
Project:Oppdragsgiver: Norges forskningsråd
Frisch prosjekt: 1101 - Qualifications, education, and productivity