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Sorting out Neighbourhood Effects Using Sibling Data

Author

Listed:
  • Hedman, Lina

    (Uppsala University)

  • Manley, David

    (University of Bristol)

  • van Ham, Maarten

    (Delft University of Technology)

Abstract

Previous research has reported evidence of intergenerational transmission of both neighbourhood status and social and economic outcomes later in life; parents influence where their children live as adults and how well they do later in life in terms of their income. However, interactions between the individual, the childhood family and neighbourhood context and the neighbourhood experiences after leaving the parental home are often overlooked which might bias estimates of neighbourhood effects. It is likely that part of the effects attributed to neighbourhoods, are actually effects of the family in which someone was brought up. This study uses a sibling design to disentangle family and neighbourhood effects on income, and synthetic sibling pairs are used as a control group. The sibling design allows us to separate the effects of childhood family and neighbourhood contexts, but also between childhood neighbourhood effects and effects of the adult neighbourhood experiences. Using data from Swedish registers we show that the neighbourhood effect from both childhood and adult neighbourhood exposure is biased upwards by the influence of the family context. This leads to the conclusion that part of what appeared to be a neighbourhood effect was in fact a lasting family effect. Interestingly, we find that there is a long lasting effect of the family context on income later in life, and that this effect is strong regardless the individual neighbourhood pathway later in life.

Suggested Citation

  • Hedman, Lina & Manley, David & van Ham, Maarten, 2017. "Sorting out Neighbourhood Effects Using Sibling Data," IZA Discussion Papers 11178, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp11178
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    References listed on IDEAS

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    3. Dan Maurice Levy & Greg Duncan, 2000. "Using Sibling Samples to Assess the Effect of Childhood Family Income on Completed Schooling," JCPR Working Papers 168, Northwestern University/University of Chicago Joint Center for Poverty Research.
    4. Lina Hedman & Maarten van Ham, 2021. "Three Generations of Intergenerational Transmission of Neighbourhood Context," Social Inclusion, Cogitatio Press, vol. 9(2), pages 129-141.
    5. Lena Lindahl, 2011. "A comparison of family and neighborhood effects on grades, test scores, educational attainment and income—evidence from Sweden," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 9(2), pages 207-226, June.
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    9. Cheti Nicoletti & Birgitta Rabe, 2013. "Inequality in Pupils' Test Scores: How Much do Family, Sibling Type and Neighbourhood Matter?," Economica, London School of Economics and Political Science, vol. 80(318), pages 197-218, April.
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    More about this item

    Keywords

    siblings; non-random sorting; neighbourhood effects; family; income; longitudinal data;
    All these keywords.

    JEL classification:

    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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