Like A Good Neighbor: The Role of Neighbors in Career Choice

Abstract

There is growing evidence that where a child grows up has long-run, economic mobility consequences. We explore the role of neighbors in this place-based transmission. Using linked census records for over 6 million boys and 4 million girls and historic census sheet microgeography, we estimate how growing up next door to someone in a particular occupation affects a child’s probability of working in that occupation as an adult, relative to other children who grew up further down the street. Living next door to someone as a child increases the probability of having the same occupation as them 30 years later by about 10 percent. High income, high education occupations are more transmissible, and ethnic, race, and child age homophily strengthens transmission, consistent with information and exposure channels. Childhood neighbors have real economic consequences. Children who grow up next to neighbors in high income occupations, such as doctors or lawyers, see gains in income and education, even relative to other children living on the same street, suggesting that neighborhood networks significantly contribute to economic mobility.