Where Children Live Matters: Housing Policy Effects on Education Outcomes

By Sarabia, Alex | Chicago Policy Review (Online), February 27, 2017 | Go to article overview

Where Children Live Matters: Housing Policy Effects on Education Outcomes


Sarabia, Alex, Chicago Policy Review (Online)


Social scientists have long suspected that the demographic characteristics and attributes of neighborhoods affect the educational outcomes of the children who live in them. However, this hypothesis is challenging to test because people tend to self-select the neighborhoods in which they live. As a result, exogenous variation - a randomized reason for residence in a given neighborhood instead of self-selection - is necessary in order to estimate the causal effect of neighborhoods on the educational outcomes of young people. Recent research following a natural experiment in Denver, Colorado establishes a link between location and education, suggesting that housing policy can improve educational achievement among Latino and African American youth.

Galster, et al. find strong evidence that neighborhoods affect education outcomes. For example, higher neighborhood occupational prestige is associated with a decrease in the risk of dropping out of school. In addition, on the negative side, social vulnerability - measured by the percentage of low-income residents, unemployed persons, renters and female-headed households - is statistically significant in predicting the rate of students repeating a grade level.

The authors leveraged the Denver Housing Authority’s (DHA) waiting list for housing assistance as a natural experiment because it mimics a random process, which means they could examine the relationship between neighborhood and educational outcome without the confounding factor of self-selection. Through the DHA program, eligible families - defined as households earning less than 80-percent of median income for the area - are offered a housing option from among a wide range of neighborhoods throughout Denver.

Each family has the right to refuse the first offer from DHA, but the authors estimate that three-fourths of all tenants choose to reside in a unit in the first neighborhood offered. Combining this natural experiment with an instrumental variable econometric approach, Galster, et al., measure the independent effect of neighborhood of residence on educational outcomes.

The study includes 764 Latino and African American youth from families with an average household income of $13,213. The researchers focus on three educational outcomes: repeating a grade in school (retention), leaving school before a diploma was earned (dropout), and final grade point average (GPA).

In handling neighborhood data, the authors compute a neighborhood social vulnerability index by summing the percentage of poor residents, unemployed workers, renters and female-headed households. A neighborhood occupational prestige score and administrative data on crime statistics are also utilized to characterize each neighborhood. Through these methods, the authors estimate the causal effect of neighborhoods on children’s education. …

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