Parental Involvement and Neighborhood Quality: Evidence from Public Housing Closures in Chicago

This paper studies whether, and how, parents respond to changing neighborhood quality through parental involvement. Empirical measurement of this response is complicated by neighborhood selection: through their residential location choices, parents have some control over neighborhood quality. To deal with neighborhood selection, I make use of the mass closures of public housing projects in Chicago. Households displaced by these closures relocated into surrounding neighborhoods, which is associated with decreased neighborhood quality in those receiving neighborhoods. These incoming relocations are used to provide variation in neighborhood quality, which is plausibly exogenous to the residential choices of receiving families. The empirical strategy used accounts the potential anticipation of incoming relocations by receiving parents, as well as the potential selection of destination neighborhoods by displaced households. Using neighborhood crime rate as a measure of neighborhood quality, I find that parents tend to increase parental involvement when neighborhood quality falls. In contrast, the effects on child behavior are much smaller in magnitude. Together, these two findings suggest that parents compensate for declining neighborhood quality by increasing parental involvement. Additionally, I find interesting heterogeneity in neighborhood quality effects across families. Most notably, parents with low initial involvement make further reinforcing decreases to parental involvement when neighborhood quality declines. Relating this result to a model of parental involvement decisions, I make inferences about the relationship between parents and neighborhoods as productive inputs for child development. Overall, these results suggest that existing estimates of neighborhood effects may underestimate the direct impact of neighborhoods on children, and that different parental responses may explain how neighborhood change has different impacts on children. Finally, these results provide evidence on the spillover effects of public housing closures on parents living in receiving neighborhoods, and characterize neighborhood effects on parental involvement for families who have not selected into low-income public housing.