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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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File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.389020.de/diw_sp0409.pdf
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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. Florence Goffette-Nagot & Claire Dujardin, 2006. "Neighborhood effects, public housing and unemployment in France," Post-Print halshs-00133854, HAL.
  2. 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.
  3. Zimmerman, David J., 1999. "Peer Effects in Academic Outcomes: Evidence From a Natural Experiment," Williams Project on the Economics of Higher Education DP-52, Department of Economics, Williams College.
  4. Giorgio Topa & Stephen Ross & Patrick Bayer, 2005. "Place of Work and Place of Residence: Informal Hiring Networks and Labor Market Outcomes," Working Papers 05-23, Center for Economic Studies, U.S. Census Bureau.
  5. Christopher A. Pissarides, 2000. "Equilibrium Unemployment Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262161877, June.
  6. Hedström, Peter & Kolm, Ann-Sofie & Åberg, Yvonne, 2003. "Social Interactions and Unemployment," Working Paper Series 2003:18, Uppsala University, Department of Economics.
  7. DUJARDIN, Claire & PEETERS, Dominique & THOMAS, Isabelle, 2009. "Neighbourhood effects and endogeneity issues," CORE Discussion Papers 2009056, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  8. Charles F. Manski, 1989. "Anatomy of the Selection Problem," Journal of Human Resources, University of Wisconsin Press, vol. 24(3), pages 343-360.
  9. Patrick J. Bayer & Stephen L. Ross, 2010. "Identifying Individual and Group Effects in the Presence of Sorting: A Neighborhood Effects Application," Working Papers 10-50, Duke University, Department of Economics.
  10. Esther Duflo & Emmanuel Saez, 2002. "The Role of Information and Social Interactions in Retirement Plan Decisions: Evidence from a Randomized Experiment," NBER Working Papers 8885, National Bureau of Economic Research, Inc.
  11. 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.
  12. 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.
  13. Besley, T. & Coate, S., 1990. "Understanding Welfare Stigma: Taxpayer Resentment And Statistical Discrimination," Papers 42, Princeton, Woodrow Wilson School - Discussion Paper.
  14. 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.
  15. 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.
  16. John P. Haisken-DeNew & Markus H. Hahn, 2010. "PanelWhiz: Efficient Data Extraction of Complex Panel Data Sets - An Example Using the German SOEP," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 130(4), pages 643-654.
  17. 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.
  18. Andrew Clark, 2001. "Unemployment As A Social Norm: Psychological Evidence from Panel Data," DELTA Working Papers 2001-17, DELTA (Ecole normale supérieure).
  19. Finneran, Lisa & Kelly, Morgan, 2003. "Social networks and inequality," Journal of Urban Economics, Elsevier, vol. 53(2), pages 282-299, March.
  20. Hilary Williamson Hoynes, 1996. "Local Labor Markets and Welfare Spells: Do Demand Conditions Matter?," NBER Working Papers 5643, National Bureau of Economic Research, Inc.
  21. 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.
  22. 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.
  23. Charles F. Manski, 2000. "Economic Analysis of Social Interactions," NBER Working Papers 7580, National Bureau of Economic Research, Inc.
  24. 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.
  25. van der Klaauw, Bas & van Ours, Jan C., 2003. "From welfare to work: does the neighborhood matter?," Journal of Public Economics, Elsevier, vol. 87(5-6), pages 957-985, May.
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