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Does neighborhood income mix affect earnings of adults? New evidence from Sweden

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  • Galster, George
  • Andersson, Roger
  • Musterd, Sako
  • Kauppinen, Timo M.

Abstract

This paper contributes to the literature on obtaining unbiased estimates of neighborhood effects, explored in the context of a centralized social welfare state. We employ a longitudinal database comprised of all working age adults in metropolitan Sweden 1991-1999 to investigate the degree to which neighborhood income mix relates to subsequent labor incomes of adults and how this relationship varies by gender and employment status. We control for unobserved, time-invariant individual characteristics by estimating a first-difference equation of changes in average incomes between the 1991-1995 and 1996-1999 periods. We further control for unobserved time varying characteristics through an analysis of non-movers. These methods substantially reduce the magnitude of the apparent effect of neighborhood shares of low-, middle- and high-income males. Nevertheless, statistically and substantively significant neighborhood effects persist, though relationships are nonlinear and vary by gender and employment status. Males who are not fully employed appear most sensitive to neighborhood economic mix in all contexts.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Urban Economics.

Volume (Year): 63 (2008)
Issue (Month): 3 (May)
Pages: 858-870

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Handle: RePEc:eee:juecon:v:63:y:2008:i:3:p:858-870

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Web page: http://www.elsevier.com/locate/inca/622905

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  1. Rachel Garshick Kleit, 2005. "HOPE VI new communities: neighborhood relationships in mixed-income housing," Environment and Planning A, Pion Ltd, London, Pion Ltd, London, vol. 37(8), pages 1413-1441, August.
  2. Yannis M. Ioannides & Linda Datcher Loury, 2004. "Job Information Networks, Neighborhood Effects, and Inequality," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 42(4), pages 1056-1093, December.
  3. Åslund, Olof & Fredriksson, Peter, 2005. "Ethnic Enclaves and Welfare Cultures – Quasi-experimental Evidence," Working Paper Series, Uppsala University, Department of Economics 2005:9, Uppsala University, Department of Economics.
  4. Galster, George, 2002. "An economic efficiency analysis of deconcentrating poverty populations," Journal of Housing Economics, Elsevier, Elsevier, vol. 11(4), pages 303-329, December.
  5. Robert Haveman & Barbara Wolfe, 1995. "The Determinants of Children's Attainments: A Review of Methods and Findings," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 33(4), pages 1829-1878, December.
  6. Edin, Per-Anders & Fredriksson, Peter & Åslund, Olof, 2000. "Ethnic enclaves and the economic success of immigrants - evidence from a natural experiment," Working Paper Series, IFAU - Institute for Evaluation of Labour Market and Education Policy 2000:9, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  7. Dawkins, Casey J. & Shen, Qing & Sanchez, Thomas W., 2005. "Race, space, and unemployment duration," Journal of Urban Economics, Elsevier, Elsevier, vol. 58(1), pages 91-113, July.
  8. Sako Musterd & Roger Andersson, 2006. "Employment, Social Mobility and Neighbourhood Effects: The Case of Sweden," International Journal of Urban and Regional Research, Wiley Blackwell, Wiley Blackwell, vol. 30(1), pages 120-140, 03.
  9. Donna Ginther & Robert Haveman & Barbara Wolfe, 2000. "Neighborhood Attributes as Determinants of Children's Outcomes: How Robust Are the Relationships?," Journal of Human Resources, University of Wisconsin Press, University of Wisconsin Press, vol. 35(4), pages 603-642.
  10. Peter Gottschalk, 1993. "Is The Correlation In Welfare Participation Across Generations Spurious?," Boston College Working Papers in Economics, Boston College Department of Economics 224, Boston College Department of Economics.
  11. Daniel Aaronson, 1998. "Using Sibling Data to Estimate the Impact of Neighborhoods on Children's Educational Outcomes," Journal of Human Resources, University of Wisconsin Press, University of Wisconsin Press, vol. 33(4), pages 915-946.
  12. John V. Pepper, 2000. "The Intergenerational Transmission Of Welfare Receipt: A Nonparametric Bounds Analysis," The Review of Economics and Statistics, MIT Press, MIT Press, vol. 82(3), pages 472-488, August.
  13. Moffitt, Robert, 1992. "Incentive Effects of the U.S. Welfare System: A Review," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 30(1), pages 1-61, March.
  14. Mary Corcoran & Roger Gordon & Deborah Laren & Gary Solon, 1992. "The Association between Men's Economic Status and Their Family and Community Origins," Journal of Human Resources, University of Wisconsin Press, University of Wisconsin Press, vol. 27(4), pages 575-601.
  15. R. D. Plotnick & S. D. Hoffman, . "The Effect of Neighborhood Characteristics on Young Adult Outcomes: Alternative Estimates," Institute for Research on Poverty Discussion Papers, University of Wisconsin Institute for Research on Poverty 1106-96, University of Wisconsin Institute for Research on Poverty.
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Citations

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Cited by:
  1. Schönwälder, Karen (Ed.), 2007. "Residential segregation and the integration of immigrants: Britain, the Netherlands and Sweden," Discussion Papers, Programme on Intercultural Conflicts and Societal Integration (AKI), Social Science Research Center Berlin (WZB) SP IV 2007-602, Social Science Research Center Berlin (WZB).
  2. Dujardin, Claire & Goffette-Nagot, Florence, 2010. "Neighborhood effects on unemployment?: A test à la Altonji," Regional Science and Urban Economics, Elsevier, Elsevier, vol. 40(6), pages 380-396, November.
  3. Jie Chen, 2013. "Housing tenure, residential mobility and adolescents’ education achievement: evidence from Sweden," The Annals of Regional Science, Springer, Springer, vol. 50(1), pages 275-294, February.
  4. Tuukka Saarimaa & Essi Eerola, 2013. "Is Social Housing Affordable?," ERSA conference papers, European Regional Science Association ersa13p927, European Regional Science Association.
  5. David Manley & Maarten van Ham, 2011. "Living in deprived neighbourhoods in Scotland. Occupational mobility and neighbourhood effects," ERSA conference papers, European Regional Science Association ersa10p547, European Regional Science Association.
  6. van Ham, Maarten & Manley, David, 2009. "The Effect of Neighbourhood Housing Tenure Mix on Labour Market Outcomes: A Longitudinal Perspective," IZA Discussion Papers 4094, Institute for the Study of Labor (IZA).
  7. Szulkin, Ryszard & Hällsten, Martin, 2009. "Families, neighborhoods, and the future: The transition to adulthood of children of native and immigrant origin in Sweden," SULCIS Working Papers, Stockholm University Linnaeus Center for Integration Studies - SULCIS 2009:9, Stockholm University Linnaeus Center for Integration Studies - SULCIS.

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