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The Making of a Ghetto: Place-Based Policies, Labeling, and Impacts on Neighborhoods and Individuals

Author

Listed:
  • Yajna Govind
  • Jack Melbourne
  • Sara Signorelli
  • Edith Zink

Abstract

Policies targeting disadvantaged areas aim to improve their conditions, but the labels they impose carry consequences of their own. In this paper, we examine Denmark's Ghetto Plan, one of the first recent place-based policies explicitly targeting migrant populations. Under this policy, certain public housing deemed problematic were officially designated as "ghettos", with minimal additional implications. Using rich administrative data and a Difference-in-Differences approach, we show that the policy backfired, worsening spatial inequality through compositional shifts driven by native avoidance. In addition, the policy was particularly detrimental to exposed natives, who accepted a 4% annual income loss to leave stigmatized areas.

Suggested Citation

  • Yajna Govind & Jack Melbourne & Sara Signorelli & Edith Zink, 2025. "The Making of a Ghetto: Place-Based Policies, Labeling, and Impacts on Neighborhoods and Individuals," RFBerlin Discussion Paper Series 2583, Rockwool Foundation Berlin (RF Berlin).
    • Handle: RePEc:crm:wpaper:2583
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    Keywords

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    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R28 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Government Policy

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