Concentrated Poverty vs. Concentrated Affluence

Effects on Neighborhood Social Environments and Children’s Outcomes

by Anne R. Pebley, Narayan Sastry

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In this paper, we examine the effects of neighborhood poverty and affluence, other neighborhood characteristics, and family characteristics on two indicators of children’s development: reading-related and math-related achievement. Our analysis makes several important contributions to research in this area. First, we examine the degree of socioeconomic inequality in children’s achievement scores using a novel approach based on summary measures analogous to the Gini coefficient of income inequality. By calculating inequality in children’s achievement scores according to levels of neighborhood income, we can estimate the proportion of total inequality in children’s achievement test scores that are accounted for by neighborhood differences in income, before and after controlling for other child, family, and neighborhood characteristics. Furthermore, we can compare the inequality in children’s achievement test scores by neighborhood income to inequality in test scores according to family factors such as family earnings and mother’s education. Second, the analysis includes stronger controls for family-level effects, both by employing a richer set of family characteristics and by including a family-level random effect. Better controls for family-level effects allow us to draw clearer conclusions about the net effects of neighborhood conditions on children’s outcomes. Third, we investigate the role of neighborhood-level median income compared to indices of concentrated poverty and concentrated affluence. In other words, we examine whether the density of poor or affluent families is more or less important than the overall level of income in the neighborhood. Finally, the analysis investigates neighborhood effects in Los Angeles, based on data from the new Los Angeles Family and Neighborhood Survey (L.A.FANS-1). Los Angeles differs considerably, physically and socially, from urban areas such as Chicago, which have figured centrally in previous research on concentrated poverty neighborhoods. Our objective is to determine whether the same types of relationship observed elsewhere are also seen in a newer urban area such as Los Angeles.

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