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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.

Suggested Citation

  • Galster, George & Andersson, Roger & Musterd, Sako & Kauppinen, Timo M., 2008. "Does neighborhood income mix affect earnings of adults? New evidence from Sweden," Journal of Urban Economics, Elsevier, vol. 63(3), pages 858-870, May.
  • Handle: RePEc:eee:juecon:v:63:y:2008:i:3:p:858-870
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    Cited by:

    1. Plum, Alexander & Knies, Gundi, 2015. "Earnings prospects for low-paid workers higher than for the unemployed but only in high-pay areas with high unemployment," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112845, Verein für Socialpolitik / German Economic Association.
    2. 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 2009:9, Stockholm University, Linnaeus Center for Integration Studies - SULCIS.
    3. Fenne M. Pinkster, 2014. "Neighbourhood Effects as Indirect Effects: Evidence from a Dutch Case Study on the Significance of Neighbourhood for Employment Trajectories," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 38(6), pages 2042-2059, November.
    4. 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) SP IV 2007-602, Social Science Research Center Berlin (WZB).
    5. Dujardin, Claire & Goffette-Nagot, Florence, 2010. "Neighborhood effects on unemployment?: A test à la Altonji," Regional Science and Urban Economics, Elsevier, vol. 40(6), pages 380-396, November.
    6. Rune V. Lesner, 2016. "The Long-Term Effect of Childhood Poverty," Economics Working Papers 2016-08, Department of Economics and Business Economics, Aarhus University.
    7. Tuukka Saarimaa & Essi Eerola, 2013. "Is Social Housing Affordable?," ERSA conference papers ersa13p927, European Regional Science Association.
    8. Kwan Ok Lee, 2014. "Why Do Renters Stay In Or Leave Certain Neighborhoods? The Role Of Neighborhood Characteristics, Housing Tenure Transitions, And Race," Journal of Regional Science, Wiley Blackwell, vol. 54(5), pages 755-787, November.
    9. David Manley & Maarten van Ham, 2011. "Living in deprived neighbourhoods in Scotland. Occupational mobility and neighbourhood effects," ERSA conference papers ersa10p547, European Regional Science Association.
    10. 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).
    11. Sari, Florent, 2015. "Public transit and labor market outcomes: Analysis of the connections in the French agglomeration of Bordeaux," Transportation Research Part A: Policy and Practice, Elsevier, vol. 78(C), pages 231-251.
    12. Monkkonen, Paavo & Zhang, Xiaohu, 2014. "Innovative measurement of spatial segregation: Comparative evidence from Hong Kong and San Francisco," Regional Science and Urban Economics, Elsevier, vol. 47(C), pages 99-111.
    13. Marko Kryvobokov & Louafi Bouzouina, 2014. "Willingness to pay for accessibility under the conditions of residential segregation," Post-Print halshs-01082820, HAL.
    14. Jie Chen, 2013. "Housing tenure, residential mobility and adolescents’ education achievement: evidence from Sweden," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 50(1), pages 275-294, February.

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