NEIGHBORHOOD EFFECTS AND PARENTAL INVOLVEMENT IN THE INTERGENERATIONAL TRANSMISSION OF EDUCATION*

ABSTRACT We analyze the intergenerational transmission of education focusing on the interplay between family and neighborhood effects. We develop a theoretical model suggesting that both neighborhood quality and parental effort are of importance for the education attained by children. This model proposes a mechanism explaining why and how they are of importance, distinguishing between high‐ and low‐educated parents. We then bring this model to the data using a longitudinal dataset in Britain. The available information on social housing in big cities allows us to identify the role of neighborhood in educational outcomes. We find that the better the quality of the neighborhood, the higher is the parents' involvement in their children's education. A novel finding with respect to previous U.S. studies is that family is of importance for children with highly educated parents while it is the community that is crucial for the educational achievement of children from low‐educated families.