The Daily. Monday, June 3, 2002

Neighbourhoods and long-term success in the labour market

The quality of the neighbourhood in which youths in low-income families grow up makes little difference to their chances of succeeding in the labour market, according to a new study of youths raised in low-income families in Toronto.

Estimates of earnings and wage distributions for youths who grew up in low-income and middle-income neighbourhoods were almost exactly the same, the study found.

The study followed youths from low-income households who grew up in substantially different types of neighbourhoods in Toronto from the age of 16 up to 35. These youths were divided into two groups according to the type of neighbourhoods they lived in. One group lived in large public housing projects in low-income central-city neighbourhoods. The other lived in more than 40 low-income projects with fewer than 250 units. These were located in census tracts throughout the city in which fewer than 25% of households were below Statistics Canada's low-income cutoff. Families had only limited choices in the neighbourhood to which they were assigned, and this restriction made the results easier to interpret.

The key result of the study was that youths from the lowest income neighbourhoods of Toronto fared about the same as those from middle-income neighbourhoods. Eventual adult income, earnings, social assistance participation and education attainment were about the same for the two groups.

Average income for youths tracked to the age of 27 to 35 from the lowest income neighbourhoods was $20,950. This compares with $21,461 in average income for those from the better off neighbourhoods - only a 2% difference. About 32% from the low income neighbourhoods relied on social assistance for at least one year between 1993 and 1999, compared with 31% of those from the middle income neighbourhoods. The average years of schooling for youths aged 16 to 25, while living at home, was 12.3 years in low-income neighbourhoods compared with 12.2 years for those in middle-income areas. The proportion not working and not attending school was also essentially the same across both groups.

The study focussed on neighbourhood effects for labour market success and self-sufficiency, and did not examine crime participation, health, and overall well being. These outcomes may be important but are beyond the scope of this analysis.

Neighbourhood quality did affect the exposure of youth to crime. Criminal activity was much higher in the low-income neighbourhoods. Homicides, sexual assaults and drug offenses were three to five times more frequent than in the better-off neighbourhoods, even on a per household basis.

The research paper Do neighbourhoods influence long-term labour market success? A comparison of adults who grew up in different public housing projects, no. 185 (11F0019MIE, free) is now available on Statistics Canada's Web site (). From the Products and services page, choose Research papers (free) and then Social conditions.

For more information, or to enquire about the concepts, methods or data quality of this release, contact Miles Corak (613-951-9047), Family and Labour Studies Division.