This article was originally published in May 2018.
A crucial question for policy is why do children growing up in some areas tend to do better than those growing up in others. A new LCC Working Paper by Nathan Deutscher answers this question by examining children who move neighbourhoods to see whether their outcomes mirror the children they left behind or the children they joined. Importantly, he also looks beyond why place matters and examines when in childhood it matters most.
Deutscher finds that moving earlier makes a difference, with the results suggesting an individual moving at birth would receive around 70% of any benefit associated with their destination. Further, place appears to be most influential in the teenage years. Each year a teenager spends in a destination moves their expected outcomes around 4% closer to those in that destination.
The author suggests two explanations for why place matters, particularly in the teenage years. First, he suggests that place can matter because where you grow up is often where you end up working. If a child ends up in a stronger local labour market they will likely do better. Second, he suggests that place can matter because it influences who you grow up with. That is, if the other kids born in your postcode and year happen to come from richer families, you tend to do better.
You can read the Working Paper here.