Table 4.

Estimated Lifetime Earnings Effect of Moving Child from Bottom to Top Quartile Neighborhood

	National Prices	Local Prices
In 2010 Prices
Lifetime income if raised in bottom quartile	$2,442,612	$2,396,837
Lifetime income if raised in top quartile	$3,077,692	$3,307,635
Difference	$635,079	$910,798
Net Present Value at age 34 in 2010 Prices
Lifetime income if raised in bottom quartile	$1,954,818	$1,918,184
Lifetime income if raised in top quartile	$2,463,071	$2,647,094
Difference	$508,253	$728,910

Analysis starts at age 34 with mean observed earnings for adults who grew up in bottom quartile neighborhoods. That sum is multiplied by the neighborhood effect (the coefficients from column 4 Tables 2–3 multiplied by the average difference in neighborhood income top and bottom across quartiles) to calculate the top quartile incomes at age 34. Incomes for others years were adjusted using slope of an age-income regression. The age premium was estimated to be 7% from age 16–24, 2.6% from 35–34, .8% from 35–44, .01% from 45–54, and -1.1% from 55–65. Net present value is based on 3 percent discount rate–roughly equal to average long-term treasury bond yields.