Correlations between neighboring children in their subsequent educational attainment

This study proposes using correlations between neighboring children in thei r later socioeconomic status to bound the proportion of inequality in socio economic outcomes that can be attributed to disparities in neighborhood bac kground. We apply this approach to educational attainment data from the Pan el Study of Income Dynamics, which has sampled neighboring children and fol lowed them into adulthood. We find that, once the effects of a few readily observed family background characteristics are accounted for, the correlati on between neighboring children in their eventual educational attainment is only about 0.1. Given that even this figure is inflated by neighbors' simi larity in unmeasured aspects of family background, the results suggest a li mited role for neighborhood factors in accounting for inequality in educati onal attainment.