TY  - JOUR
AU  - Chetty, Raj
AU  - Hendren, Nathaniel
TI  - The Impacts of Neighborhoods on Intergenerational Mobility II: County-Level Estimates
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 23002
PY  - 2016
Y2  - December 2016
DO  - 10.3386/w23002
UR  - http://www.nber.org/papers/w23002
L1  - http://www.nber.org/papers/w23002.pdf
N1  - Author contact info:
Raj Chetty
Department of Economics
Harvard University
Littauer 321
Cambridge, MA 02138
Tel: 617/744-9492
E-Mail: chetty@fas.harvard.edu

Nathaniel Hendren
Harvard University
Department of Economics
Littauer Center Room 235
Cambridge, MA 02138
Tel: 773/344-8990
E-Mail: nhendren@gmail.com
M2  - featured in NBER digest on 2017-02-23
AB  - We estimate the causal effect of each county in the U.S. on children's incomes in adulthood. We first estimate a fixed effects model that is identified by analyzing families who move across counties with children of different ages. We then use these fixed effect estimates to (a) quantify how much places matter for intergenerational mobility, (b) construct forecasts of the causal effect of growing up in each county that can be used to guide families seeking to move to opportunity, and (c) characterize which types of areas produce better outcomes. For children growing up in low-income families, each year of childhood exposure to a one standard deviation (SD) better county increases income in adulthood by 0.5%. Hence, growing up in a one SD better county from birth increases a child's income by approximately 10%. There is substantial local area variation in children's outcomes: for example, growing up in the western suburbs of Chicago (DuPage County) would increase a given child's income by approximately 30% relative to growing up in Cook County. Areas with less concentrated poverty, less income inequality, better schools, a larger share of two-parent families, and lower crime rates tend to produce better outcomes for children in poor families. Boys' outcomes vary more across areas than girls' outcomes, and boys have especially negative outcomes in highly segregated areas. One-fifth of the black-white income gap can be explained by differences in the counties in which black and white children grow up. Areas that generate better outcomes have higher house prices on average, but our approach uncovers many “opportunity bargains” – places that generate good outcomes but are not very expensive.
ER  -