Geography of Growing Up: Mapping Childhood Location to Later Life Outcomes

This paper examines the causal effects of neighbourhood improvement during childhood (1996–2006) on tertiary educational attainment and adult income, using longitudinal census and administrative data from New Zealand. To address residential self‐selection, we restrict analysis to families who remained in the same location but experienced varying neighbourhood trajectories. Causal inference is implemented using Structural Nested Mean Models and Regression‐with‐Residuals, which adjust for time‐varying confounding while preserving causal pathways. Treatment is defined as an improvement of at least two deciles on the New Zealand Deprivation Index (NZDep). We study two cohorts: children from moderately deprived areas (NZDep 6) and those from more severely deprived areas (NZDep 7). Neighbourhood improvement substantially increases tertiary attainment in both groups: by 17.8 percentage points in NZDep 6 and 23.3 points in NZDep 7. The gains are particularly pronounced for Māori and Pasifika children, who experience improvements at least as large as, and in some cases exceeding, the overall average, underscoring the potential for neighbourhood upgrading to reduce ethnic inequalities in educational attainment. Treatment effects on adult earnings are 22.1% for NZDep 6 (not statistically significant) and 32.0% for NZDep 7 (marginally significant, P < 0.10). This gradient is consistent with stronger neighbourhood effects at higher levels of baseline deprivation. Sensitivity analysis indicates that the neighbourhood effects are robust to unobserved confounding. In the more deprived cohort (NZDep 7), tertiary education accounts for approximately one‐quarter of the earnings effect, highlighting education as a key mechanism. Overall, the findings provide credible evidence that childhood exposure to neighbourhood upgrading improves long‐run educational attainment and, more tentatively, adult income. The effects are largest in the most disadvantaged contexts, underscoring the potential of place‐based interventions to promote social mobility and reduce intergenerational inequality.