This paper studies neighborhood effects using a dynamic general equilibrium model. Households choose where to live and how much to invest in their child's human capital. The return on parents' investment is determined in part by their child's ability and in part by a neighborhood externality. We...

There is a large divide in the education, labor market, and personal security outcomes of black and white young males in the United States. This paper develops and estimates a dynamic model of black young males' joint decisions about schooling, labor force participation, and personal security....

The interpretation of estimates from Moving to Opportunity (MTO) as neighborhood effects has created significant controversy among social scientists. This paper presents a framework that clarifies the interpretation of results from the MTO housing mobility experiment. The paper defines several...