Joint with S. Gibbons (LSE) and F. Weindhardt (LSE).

The importance of quality of peers in the neighbourhood on individual behaviour and educational achievement is widely upheld by sociologist and educational researchers. Economists instead tend to be more sceptical and attribute apparent correlations between individual outcomes and peer group behaviour/neighbourhood characteristics to the fact that individuals choose their peers and the location in which they live based on their personal characteristics. To shed light on these issues, we make use of information contained in pupil-level and school-level administrative data provided by the Department for Children, Schools and Families (DCSF) matched to other administrative data sources. We use this combined set of information to analyse to effect of quality of peers in the neighbourhood, and more generally quality of the neighbourhood, on individual achievements during Secondary education. To define the quality of one student’s neighbourhood, we construct several aggregate indicators based on geographical areas that group a handful of postcodes surrounding pupil’s place of residence. Among others, these include aggregate information about the educational quality of the peers in the neighbourhood – such as average attainments – as well as proxies for the overall quality of the neighbourhood – such as average unemployment rates. Different strategies are used to account for the fact that place of residence is a choice variable determined by unobservable family characteristics and preferences about school quality and neighbourhood amenity. All in all, our results show little evidence of sizeable neighbourhood effect on young people’s educational attainments.
 

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