Neighbourhood Effects Across Generations and the Reproduction of Inequality.

Abstract

This paper analyses the enduring impact of neighbourhood deprivation on youth development, exploring multigenerational aspects often overlooked in existing research. I investigate how neighbourhood environments experienced across two generations impact youth outcomes, focussing on cognitive skills and socio-emotional behaviour. Using data from the 1958 National Child Development Study in the UK, this study employs a Regression with Residuals (RWR) design to comprehensively assess any long-lasting effects. The results point to an enduring impact of neighbourhood deprivation on both outcomes, revealing that sustained exposure to disadvantage drives persistently different developmental trajectories. I find evidence for a transmission mechanism, indicating that exposure to neighbourhood deprivation during parental own formative years affects their offspring's outcomes, directly and indirectly. While parental formative neighbourhood environments significantly shape cognitive development through mechanisms related to education and income, socio-emotional outcomes are also influenced by the legacy of neighbourhood context across generations. While conventional approaches focus on a single point in time, this study contributes to neighbourhood effects literature by taking a lengthier perspective and acknowledging the protracted and influential role that neighbourhoods as social institutions may play in shaping individual opportunities and inequality dynamics over time.