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Neighbourhoods, Households and Income Dynamics: A Semi-Parametric Investigation of Neighbourhood Effects

Author

Listed:
  • Bolster, Anne
  • Burgess, Simon
  • Johnston, Ron
  • Jones, Kelvyn
  • Propper, Carol
  • Sarker, Rebecca

Abstract

Using a unique dataset, we present evidence on income trajectories of people living in micro neighbourhoods. We place bounds on the influence of neighbourhood making as few parametric assumptions as possible. The Paper offers a number of advances. We exploit a dataset that is large, representative, longitudinal with very local neighbourhoods. We analyse income growth over one, five- and ten-year windows. We analyse the whole distribution of income growth and track large gainers and losers as well as average outcomes. We consider the appropriate definition of neighbourhood. We find little evidence of a negative relationship between neighbourhood and subsequent income growth.

Suggested Citation

  • Bolster, Anne & Burgess, Simon & Johnston, Ron & Jones, Kelvyn & Propper, Carol & Sarker, Rebecca, 2004. "Neighbourhoods, Households and Income Dynamics: A Semi-Parametric Investigation of Neighbourhood Effects," CEPR Discussion Papers 4611, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:4611
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    References listed on IDEAS

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    4. Brock,W.A. & Durlauf,S.N., 2003. "Multinomial choice with social interactions," Working papers 1, Wisconsin Madison - Social Systems.
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    Cited by:

    1. Claire Dujardin & Florence Goffette-Nagot, 2005. "Neighborhood effects, public housing and unemployment in France," Post-Print halshs-00180046, HAL.
    2. Stephen Gibbons & Olmo Silva & Felix Weinhardt, 2013. "Everybody Needs Good Neighbours? Evidence from Students’ Outcomes in England," Economic Journal, Royal Economic Society, vol. 123, pages 831-874, September.
    3. Andrew E. Clark & Nicolai Kristensen & Niels Westergård-Nielsen, 2009. "Economic Satisfaction and Income Rank in Small Neighbourhoods," Journal of the European Economic Association, MIT Press, vol. 7(2-3), pages 519-527, 04-05.
    4. 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.
    5. Catia Nicodemo & Gustavo Adolfo García, 2015. "Job Search Channels, Neighborhood Effects, and Wages Inequality in Developing Countries: The Colombian Case," The Developing Economies, Institute of Developing Economies, vol. 53(2), pages 75-99, June.
    6. 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.
    7. Maarten van Ham & David Manley, 2012. "Neighbourhood effects research at a crossroads. Ten challenges for future research," Environment and Planning A, Pion Ltd, London, vol. 44(12), pages 2787-2793, December.
    8. Anna Piil Damm & Marie Louise Schultz-Nielsen, 2008. "The Construction of Neighbourhoods and its Relevance for the Measurement of Social and Ethnic Segregation: Evidence from Denmark," CReAM Discussion Paper Series 0810, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
    9. Cheshire, Paul, 2009. "Policies for mixed communities: faith-based displacement activity?," LSE Research Online Documents on Economics 30783, London School of Economics and Political Science, LSE Library.
    10. Carlsson, Magnus & Abrar Reshid, Abdulaziz & Rooth, Dan-Olof, 2018. "Neighborhood Signaling Effects, Commuting Time, and Employment: Evidence from a Field Experiment," IZA Discussion Papers 11284, Institute for the Study of Labor (IZA).
    11. van Ham, Maarten & Boschman, Sanne & Vogel, Matt, 2017. "Incorporating Neighbourhood Choice in a Model of Neighbourhood Effects on Income," IZA Discussion Papers 10694, Institute for the Study of Labor (IZA).
    12. 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.
    13. 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).
    14. Lina Hedman & David Manley & Maarten van Ham & John Östh, 2015. "Cumulative exposure to disadvantage and the intergenerational transmission of neighbourhood effects," Journal of Economic Geography, Oxford University Press, vol. 15(1), pages 195-215.
    15. Andrew E. Clark & Nicolai Kristensen & Niels Westergård-Nielsen, 2008. "Economic satisfaction and income rank in small neighbourhoods," Working Papers halshs-00586254, HAL.
    16. van Ham, Maarten & Manley, David, 2013. "Occupational Mobility and Living in Deprived Neighbourhoods: Housing Tenure Differences in 'Neighbourhood Effects'," IZA Discussion Papers 7815, Institute for the Study of Labor (IZA).
    17. Petrović, Ana & Manley, David & van Ham, Maarten, 2018. "Freedom from the Tyranny of Neighbourhood: Rethinking Socio-Spatial Context Effects," IZA Discussion Papers 11416, Institute for the Study of Labor (IZA).
    18. Vassilis Tselios & Inge Noback & Jouke Dijk & Philip McCann, 2015. "Integration Of Immigrants, Bridging Social Capital, Ethnicity, And Locality," Journal of Regional Science, Wiley Blackwell, vol. 55(3), pages 416-441, June.
    19. Zwiers, Merle & Bolt, Gideon & van Ham, Maarten & van Kempen, Ronald, 2014. "Neighborhood Decline and the Economic Crisis," IZA Discussion Papers 8749, Institute for the Study of Labor (IZA).
    20. ., 2014. "Urban policies," Chapters,in: Urban Economics and Urban Policy, chapter 8, pages 185-218 Edward Elgar Publishing.

    More about this item

    Keywords

    income dynamics; neighbourhood effects; small scale neighbourhoods;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General

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