The majority of children in the United States attend a neighborhood school in close proximity to their home. Consequently, the demographic and economic composition of neighborhoods and the social processes therein can be consequential for schools. A large body of research has attempted to understand the processes that give rise to neighborhood sorting and the consequences of such sorting for child and adult educational and economic outcomes. Research on neighborhood effects attempts to estimate the causal effect of living in a particular neighborhood on individual’s educational and economic outcomes such as test scores, high school graduation, college attendance, employment status, or wages. This entry provides an overview of research on neighborhood effects. First, it describes the mechanisms that lead to neighborhood sorting, with a focus ...