Abstract
Studies of neighbourhood effects on educational attainment have generally found that such effects exist. However, two deficiencies are common in these studies: a lack of information on the mechanisms of neighbourhood effects and lack of information on multiple contexts. These deficiencies are addressed in this article by using school data to gain further knowledge of the mechanism of an observed neighbourhood effect on young people's education in Helsinki, Finland. The results show that the effect of neighbourhood's educational composition on educational choice is for a large part mediated by school's socioeconomic composition. This indicates that the neighbourhood effect operates through the school context. Schools are also independently associated with educational choice. While the neighbourhood effect is a non-linear top-end effect, the school's socioeconomic composition has a linear association with educational choice, which leads to different kinds of political implications.
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