1. Long Run Consequences of Living in a Poor Neighbourhood By: Phillip Oreopolous Presented by: Julian Joca, Daria Pavlova, Laura Jaczenko, Andrew Nguyen, Jocelyn Gillespie, Zachary Goodbaum

2. Goals of the Study Does the quality of the neighbourhood affect a child’s long run labour market outcome Examine effects on the long run labour market outcomes adults assigned to different residential housing projects as children

3. Main Findings Neighbourhood quality plays little role in determining a youth’s… Eventual earnings Unemployment likelihood Welfare participation

4. Background of the Study Why Toronto projects? Size, location, and neighbourhood surroundings Metro Toronto Housing Corporation Reason for the study Determine if neighbourhoods really have an impact on the individual No paper focused on Canadian neighbourhood quality before

5. Neighbourhood Importance Outcomes expected to be affected by Peer groups/role model effects Social network Personal contacts Resources for local public goods Conformism

6. Data Sources Metro Toronto Housing Corporation (MTHC) Subsidized housing from 1949-mid1970s 29,000 households 113 family projects Intergenerational Income Database (IID) Links tax data of children born 1963-1970 and their parents for years 1978-1999

7. MTHC in 1996

8. Methods Dividing projects by neighbour quality and then compared mean outcomes across these categories Correlation was estimated between unrelated neighbours who lived in the same project Compared this with the correlation between siblings

9. Application Process Point System until 1995 Given 2 offers Can reject first relocation offer Is the process truly random?

10. Results – Difference of Means Boys in wealthier neighbourhoods earn 24% more then boys in poorest neighbourhoods Men make 17% more in smaller project compared to larger project Welfare Participation fell by 30.4% if adults lived in low density projects

11. Results – Family Differences Family background through sibling correlation explain up to 30% of variance on income and wages Neighbourhood quality does not make much of a difference on long run labour outcomes

12. Criticisms Unclear thesis statement Families were given two offers without being removed from the waiting list Applicants could specify six regional preferences

13. Conclusion Main findings Neighborhood quality does not make much difference to labour market success in the long run Family differences are the reasons for most of the variances in long run labour outcomes