Faber, Jacob and Peter Rich (equal authors). 2018. “Financially Overextended: College Attendance as a Contributor to Foreclosures During the Great Recession.” Demography (October).  Demography     Full text     Washington Post coverage    Cornell Chronicle coverage     Marketwatch coverage

Although subprime mortgage lending and unemployment were largely responsible for the wave of foreclosures during the Great Recession, additional sources of financial risk may have exacerbated the crisis. We hypothesize that many parents sending children to college were financially overextended and vulnerable to foreclosure as the economy contracted. With commuting zone panel data from 2006 to 2011, we show that increasing rates of college attendance across the income distribution in one year predict a foreclosure rate increase in subsequent years, net of fixed characteristics and changes in employment, refinance debt, house prices, and 19-year-old population size. We find similar evidence of college-related foreclosure risk using longitudinal household data from the Panel Study of Income Dynamics. Our findings uncover a previously overlooked dimension of the foreclosure crisis, and highlight mortgage insecurity as an inadvertent consequence of parental investment in higher education.

Note: This project was funded by a grant from the Russell Sage Foundation.

Torche, Florencia and Peter Rich. 2017. “Declining Racial Stratification in Marriage Choices? Trends in Black/White Status Exchange in the United States, 1980-2010.” Sociology of Race and Ethnicity 3(1): 31-49.  SRE     Contexts coverage     Torche & Rich Replication Package

The status exchange hypothesis suggests that partners in black/white marriages in the United States trade racial for educational status, indicating strong hierarchical barriers between racial groups. The authors examine trends in status exchange in black/white marriages and cohabitations between 1980 and 2010, a period during which these unions increased from 0.3 percent to 1.5 percent of all young couples. The authors find that status exchange between black men and white women did not decline among either marriages or cohabitations, even as interracial unions became more prevalent. The authors also distinguish two factors driving exchange: (1) the growing probability of marrying a white person as educational attainment increases for both blacks and whites (educational boundaries) and (2) a direct trade of race-by-education between partners (dyadic exchange). Although the theoretical interpretation of exchange has focused on the latter factor, the authors show that status exchange largely emerges from the former.

Rich, Peter and Jennifer Jennings. 2015. “Choice, Information, and Constrained Options: School Transfers in a Stratified Educational System.” American Sociological Review 80(5):1069-1098.  ASR     Online Supplement     LSE blog     U.S. News & World Report coverage

It is well known that family socioeconomic background influences childhood access to opportunities. Educational reforms that introduce new information about school quality may lead to increased inequality if families with more resources are better able to respond. However, these policies can also level the playing field for choice by equalizing disadvantaged families’ access to information. This study assesses how a novel accountability system affected family enrollment decisions in the Chicago Public Schools by introducing new test performance information and consequences. We show that a substantial proportion of families responded by transferring out when their child’s school was assigned “probation.” Poor families transferred children to other schools in the district, but at a lower rate than non-poor families, who were also more likely to leave for another district or enroll in private school. Most striking, we show that despite family response to the probation label, access to higher-performing schools changed very little under the new policy; students who left probation schools were the most likely of all transfer students to enroll in other low-performing schools in the district. Although new information changed families’ behavior, it did not address contextual and resource-dependent factors that constrain the educational decisions of poor families.

Besbris, Max, Jacob Faber, Peter Rich, and Patrick Sharkey (equal authors). 2015. “The Effect of Neighborhood Stigma on Economic Transactions.” Proceedings of the National Academy of Sciences: 112(16).   PNAS     Article PDF    Washington Post coverage     Replication Package

The hypothesis of neighborhood stigma predicts that individuals who reside in areas known for high crime, poverty, disorder, and/or racial isolation embody the negative characteristics attributed to their communities and experience suspicion and mistrust in their interactions with strangers. This article provides an experimental test of whether neighborhood stigma affects individuals in one domain of social life: economic transactions. To evaluate the neighborhood stigma hypothesis, this study adopts an audit design in a locally organized, online classified market, using advertisements for used iPhones and randomly manipulating the neighborhood of the seller. The primary outcome under study is the number of responses generated by sellers from disadvantaged relative to advantaged neighborhoods. Advertisements from disadvantaged neighborhoods received significantly fewer responses than advertisements from advantaged neighborhoods. Results provide robust evidence that individuals from disadvantaged neighborhoods bear a stigma that influences their prospects in economic exchanges. The stigma is greater for advertisements originating from disadvantaged neighborhoods where the majority of residents are black. This evidence reveals that residence in a disadvantaged neighborhood not only affects individuals through mechanisms involving economic resources, institutional quality, and social networks but also affects residents through the perceptions of others.

Book chapter: Besbris, Max, Jacob Faber, Peter Rich, and Patrick Sharkey (equal authors). 2018. “The Geography of Stigma: Experimental Methods to Identify the Penalty of Place” in Audit Studies: Behind the Scenes with Theory, Method and Nuance, ed. Michael Gaddis. New York, NY: Springer (ISBN #978-3319711522).     Springer  

The United States remains a spatially segregated nation by many measures including race, income, wealth, political views, education, and immigration status. Scholars have, for many years, grappled with questions stemming from spatial inequality and have come to recognize the neighborhood in which an individual lives as a socially organizing unit of space, predictive of many individual-level outcomes. The mechanisms that underlie the relationship between neighborhoods and outcomes for residents, however, remain relatively underexplored. In this chapter, we show how the use of audits and field experiments can help uncover one such mechanism—place-based stigma in social interactions. Specifically, we describe the methodology of a previous study (Besbris et al. 2015) that revealed how signaling residence in a poor community of color negatively affected sellers’ ability to attract buyers in a classified marketplace. We focus on the study’s operationalization of neighborhoods and show how future research can use non-individual-level treatment characteristics such as units of space. Doing so helps us better understand the causal relationship between space and individual-level outcomes, as well as better parse the effects of individual-level variables versus non-individual-level variables, which are often conflated in non-experimental research. We close by suggesting the implementation of field experiments in testing for effects at other geographic scales, such as metropolitan area, state, region, country, or continent.