Is it the family or the neighborhood? Evidence from sibling and neighbor correlations in youth education and health

In this paper, we present sibling and neighbor correlations in school grades and cognitive skills, as well as indicators of physical and mental health, for a sample of German adolescents. In a first step, we estimate sibling correlations and find a substantial influence of shared family and community background on all outcomes. To further disentangle the influence of family background and neighborhood, we estimate neighbor correlations. Our results show that for all outcomes, the estimated neighbor correlations are clearly lower than the estimated sibling correlations. However, especially for cognitive skills and mental health, neighbor correlations are still substantial in relation to sibling correlations. Thus, compared to existing results from other countries, the influence of the neighborhood on these outcomes is not negligible in Germany.