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Neighbourhoods, economic incentives and post compulsory education choices

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  • Lindvall, Lars

    () (Department of Economics, Uppsala University)

Abstract

There are large differences in income and education levels, unemployment and ethnic composition between neighbourhoods. An interesting question is whether a neighbourhood’s characteristics affect the behaviour of its residents. This paper investigates neighbourhood effects on youths’ post primary education choice. Besides including usual variables the paper also includes neighbourhood specific economic incentives. Estimating linear probability models as well as multinomial logit models using Swedish register data, covering the county of Stockholm and the years 1988–1992, I find that both neighbourhood characteristics and economic incentives affect the choice. For the latter the results are quite clear although the size of the effect is small: an increase in the expected income of an alternative increases the probability that this alternative is chosen. For the neighbourhood variables the results differ to some extent depending on the model. The proportion of individuals with at most compulsory education in a neighbourhood does however seem to have a negative effect on applying for a university preparatory programme. The proportion of immigrants in a neighbourhood tend to have a positive effect on immigrants’ probability to apply for a university preparatory programme.

Suggested Citation

  • Lindvall, Lars, 2009. "Neighbourhoods, economic incentives and post compulsory education choices," Working Paper Series 2009:11, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  • Handle: RePEc:hhs:ifauwp:2009_011
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    File URL: http://www.ifau.se/upload/pdf/se/2009/wp09-11.pdf
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    References listed on IDEAS

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    11. Barbara Wolfe & Robert Haveman & Karen Pence & Jonathan Schwabish, 2007. "Do youth nonmarital childbearing choices reflect income and relationship expectations?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 20(1), pages 73-100, February.
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    Cited by:

    1. Gustafsson, Björn Anders & Katz, Katarina & Österberg, Torun, 2016. "Why Do Some Young Adults Not Graduate from Upper Secondary School? On the Importance of Signals of Labour Market Failure," IZA Discussion Papers 9886, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    Neighbourhoods; economic incentives; educational choice;

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • R19 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Other

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