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Neighborhood Effects and Individual Unemployment

  • Thomas K. Bauer
  • Michael Fertig
  • Matthias Vorell

Using a unique dataset for Germany that links individual longitudinal data from the SOEP to regional data from the federal employment agency and data of real estate prices, we evaluate the impact of neighborhood unemployment on individual employment propects. The panel setup and richness of the data allows us to overcome some of the identification problems which are present in this strand of literature. The empirical results indicate that there is a significant negative impact of neighborhood unemployment on the individual employment probability.

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Paper provided by DIW Berlin, The German Socio-Economic Panel (SOEP) in its series SOEPpapers on Multidisciplinary Panel Data Research with number 409.

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Length: 40 p.
Date of creation: 2011
Date of revision:
Handle: RePEc:diw:diwsop:diw_sp409
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  1. Bruce A. Weinberg & Patricia B. Reagan & Jeffrey J. Yankow, 2004. "Do Neighborhoods Affect Hours Worked? Evidence from Longitudinal Data," Journal of Labor Economics, University of Chicago Press, vol. 22(4), pages 891-924, October.
  2. Krauth, Brian V., 2004. "A dynamic model of job networking and social influences on employment," Journal of Economic Dynamics and Control, Elsevier, vol. 28(6), pages 1185-1204, March.
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  6. Claire Dujardin & Florence Goffette-Nagot, 2010. "Neighborhood effects on unemployment ? A test à la Altonji," Post-Print halshs-00435119, HAL.
  7. Charles F. Manski, 1989. "Anatomy of the Selection Problem," Journal of Human Resources, University of Wisconsin Press, vol. 24(3), pages 343-360.
  8. Ioannides, Yannis M. & Zabel, Jeffrey E., 2008. "Interactions, neighborhood selection and housing demand," Journal of Urban Economics, Elsevier, vol. 63(1), pages 229-252, January.
  9. Patrick Bayer & Stephen L. Ross, 2006. "Identifying Individual and Group Effects in the Presence of Sorting: A Neighborhood Effects Application," Working papers 2006-13, University of Connecticut, Department of Economics, revised Jan 2009.
  10. David J. Zimmerman, 2003. "Peer Effects in Academic Outcomes: Evidence from a Natural Experiment," The Review of Economics and Statistics, MIT Press, vol. 85(1), pages 9-23, February.
  11. DUJARDIN, Claire & PEETERS, Dominique & THOMAS, Isabelle, . "Neighbourhood effects and endogeneity issues," CORE Discussion Papers RP 2173, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  12. Assar Lindbeck & Sten Nyberg & Jšrgen W. Weibull, 1999. "Social Norms And Economic Incentives In The Welfare State," The Quarterly Journal of Economics, MIT Press, vol. 114(1), pages 1-35, February.
  13. S. N. Durlauf, . "A Framework for the Study of Individual Behavior and Social Interactions," Institute for Research on Poverty Discussion Papers 1220-01, University of Wisconsin Institute for Research on Poverty.
  14. Finneran, Lisa & Kelly, Morgan, 2003. "Social networks and inequality," Journal of Urban Economics, Elsevier, vol. 53(2), pages 282-299, March.
  15. John P. Haisken-DeNew & Markus H. Hahn, 2010. "PanelWhiz - Efficient Data Extraction of Complex Panel Data Sets: An Example Using the German SOEP," Data Documentation 53, DIW Berlin, German Institute for Economic Research.
  16. Charles F. Manski, 2000. "Economic Analysis of Social Interactions," NBER Working Papers 7580, National Bureau of Economic Research, Inc.
  17. van der Klaauw, B. & van Ours, J.C., 2003. "From welfare to work : Does the neighbourhood matter?," Other publications TiSEM 196c643f-07ca-496b-950c-b, Tilburg University, School of Economics and Management.
  18. Hedström, Peter & Kolm, Ann-Sofie & Åberg, Yvonne, 2003. "Social interactions and unemployment," Working Paper Series 2003:15, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  19. Besley, T. & Coate, S., 1990. "Understanding Welfare Stigma: Taxpayer Resentment And Statistical Discrimination," Papers 42, Princeton, Woodrow Wilson School - Discussion Paper.
  20. Woittiez, Isolde & Kapteyn, Arie, 1998. "Social interactions and habit formation in a model of female labour supply," Journal of Public Economics, Elsevier, vol. 70(2), pages 185-205, November.
  21. Andrew Clark, 2001. "Unemployment As A Social Norm: Psychological Evidence from Panel Data," DELTA Working Papers 2001-17, DELTA (Ecole normale supérieure).
  22. Florence Goffette-Nagot & Claire Dujardin, 2006. "Neighborhood effects, public housing and unemployment in France," Post-Print halshs-00133854, HAL.
  23. Christopher A. Pissarides, 2000. "Equilibrium Unemployment Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262161877, June.
  24. Manski, Charles F., 1993. "Dynamic choice in social settings : Learning from the experiences of others," Journal of Econometrics, Elsevier, vol. 58(1-2), pages 121-136, July.
  25. Jason M. Fletcher, 2010. "Social interactions and smoking: evidence using multiple student cohorts, instrumental variables, and school fixed effects," Health Economics, John Wiley & Sons, Ltd., vol. 19(4), pages 466-484.
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