IDEAS home Printed from https://ideas.repec.org/p/irs/cepswp/2021-05.html
   My bibliography  Save this paper

Investigating neighbourhood effects in welfare-to-work transitions

Author

Listed:
  • Vincent Dautel
  • Alessio Fusco

Abstract

We analyse the existence and underlying mechanisms of neighbourhood effects in welfare-to-work transitions. The analysis is based on Luxembourg social security longitudinal data, which covers the period 2001-2015 and provides precise information at the postcode level, corresponding mostly to streets. Our identification strategy exploits plausible exogenous variations among neighbours provided by the thinness of the housing market once controlling for residential sorting. We first examine interactions among all neighbours using an individual-level analysis, before focusing on interactions among only welfare recipients using a matched-pair analysis. This second step allows us to deal with the mediating effect of welfare recipients' citizenship. The main findings highlight the existence of neighbourhood effects in welfare-to-work transitions, which are also affected by the characteristics of the neighbours, including their citizenship. These characteristics suggest that social norms and/or stigma prevail in welfare-to-work transitions over the support for welfare recipients to find a job, but not over the in-group support for welfare recipients. The matched-pair analysis provides contrasting results across citizenship for individuals from large-sized citizenship groups (interactions within the own group) and individuals from medium-sized groups (interactions between groups).

Suggested Citation

  • Vincent Dautel & Alessio Fusco, 2021. "Investigating neighbourhood effects in welfare-to-work transitions," LISER Working Paper Series 2021-05, Luxembourg Institute of Socio-Economic Research (LISER).
    • Handle: RePEc:irs:cepswp:2021-05
    as

    Download full text from publisher

    File URL: https://liser.elsevierpure.com/en/publications/investigating-neighbourhood-effects-in-welfare-to-work-transition
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Alesina, Alberto & Murard, Elie & Rapoport, Hillel, 2019. "Immigration and Preferences for Redistribution in Europe," IZA Discussion Papers 12130, Institute of Labor Economics (IZA).
    2. Joseph G. Altonji & Todd E. Elder & Christopher R. Taber, 2005. "Selection on Observed and Unobserved Variables: Assessing the Effectiveness of Catholic Schools," Journal of Political Economy, University of Chicago Press, vol. 113(1), pages 151-184, February.
    3. Gordon B. Dahl & Katrine V. L?ken & Magne Mogstad, 2014. "Peer Effects in Program Participation," American Economic Review, American Economic Association, vol. 104(7), pages 2049-2074, July.
    4. Patrick Bayer & Stephen L. Ross & Giorgio Topa, 2008. "Place of Work and Place of Residence: Informal Hiring Networks and Labor Market Outcomes," Journal of Political Economy, University of Chicago Press, vol. 116(6), pages 1150-1196, December.
    5. Vincent Dautel & Olivier Walther, 2014. "The geography of innovation in a small metropolitan region: An intra-regional approach in Luxembourg," Papers in Regional Science, Wiley Blackwell, vol. 93(4), pages 703-725, November.
    6. Alberto Abadie & Susan Athey & Guido W Imbens & Jeffrey M Wooldridge, 2023. "When Should You Adjust Standard Errors for Clustering?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 138(1), pages 1-35.
    7. Marianne Bertrand & Erzo F. P. Luttmer & Sendhil Mullainathan, 2000. "Network Effects and Welfare Cultures," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(3), pages 1019-1055.
    8. Alberto Alesina & Reza Baqir & William Easterly, 1999. "Public Goods and Ethnic Divisions," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(4), pages 1243-1284.
    9. Tito Boeri, 2010. "Immigration to the Land of Redistribution," Economica, London School of Economics and Political Science, vol. 77(308), pages 651-687, October.
    10. Ethan Cohen‐Cole & Giulio Zanella, 2008. "Unpacking Social Interactions," Economic Inquiry, Western Economic Association International, vol. 46(1), pages 19-24, January.
    11. Cutler, David M. & Glaeser, Edward L. & Vigdor, Jacob L., 2008. "When are ghettos bad? Lessons from immigrant segregation in the United States," Journal of Urban Economics, Elsevier, vol. 63(3), pages 759-774, May.
    12. Aizer, Anna & Currie, Janet, 2004. "Networks or neighborhoods? Correlations in the use of publicly-funded maternity care in California," Journal of Public Economics, Elsevier, vol. 88(12), pages 2573-2585, December.
    13. Olof Åslund & Peter Fredriksson, 2009. "Peer Effects in Welfare Dependence: Quasi-Experimental Evidence," Journal of Human Resources, University of Wisconsin Press, vol. 44(3).
    14. Raj Chetty & Nathaniel Hendren & Lawrence F. Katz, 2016. "The Effects of Exposure to Better Neighborhoods on Children: New Evidence from the Moving to Opportunity Experiment," American Economic Review, American Economic Association, vol. 106(4), pages 855-902, April.
    15. Leah Boustan & Fernando Ferreira & Hernan Winkler & Eric M. Zolt, 2013. "The Effect of Rising Income Inequality on Taxation and Public Expenditures: Evidence from U.S. Municipalities and School Districts, 1970–2000," The Review of Economics and Statistics, MIT Press, vol. 95(4), pages 1291-1302, October.
    16. J. V. Henderson & J. F. Thisse (ed.), 2004. "Handbook of Regional and Urban Economics," Handbook of Regional and Urban Economics, Elsevier, edition 1, volume 4, number 4.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Grossman, Daniel & Khalil, Umair, 2020. "Neighborhood networks and program participation," Journal of Health Economics, Elsevier, vol. 70(C).
    2. Stephen L. Ross, 2009. "Social Interactions within Cities: Neighborhood Environments and Peer Relationships," Working papers 2009-31, University of Connecticut, Department of Economics.
    3. Sylvain Chareyron & Patrick Domingues & Lucie Fotsa Lieno-Gaillardon, 2021. "Does Social Interaction Matter for Welfare Participation?," Annals of Economics and Statistics, GENES, issue 141, pages 49-70.
    4. Assar Lindbeck & Mårten Palme & Mats Persson, 2016. "Sickness Absence and Local Benefit Cultures," Scandinavian Journal of Economics, Wiley Blackwell, vol. 118(1), pages 49-78, January.
    5. Florent Dubois & Christophe Muller, 2020. "The Contribution of Residential Segregation to Racial Income Gaps: Evidence from South Africa," AMSE Working Papers 2029, Aix-Marseille School of Economics, France.
    6. Simen Markussen & Knut Røed, 2015. "Social Insurance Networks," Journal of Human Resources, University of Wisconsin Press, vol. 50(4), pages 1081-1113.
    7. Panza, Laura, 2020. "The impact of ethnic segregation on schooling outcomes in Mandate Palestine," Journal of Development Economics, Elsevier, vol. 146(C).
    8. Fletcher, Jason M. & Ross, Stephen L. & Zhang, Yuxiu, 2020. "The consequences of friendships: Evidence on the effect of social relationships in school on academic achievement," Journal of Urban Economics, Elsevier, vol. 116(C).
    9. Delia Furtado & Nikolaos Theodoropoulos, 2009. "Intermarriage and Immigrant Employment: The Role of Networks," RF Berlin - CReAM Discussion Paper Series 0906, Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM).
    10. Dora L. Costa & Matthew E. Kahn, 2007. "Surviving Andersonville: The Benefits of Social Networks in POW Camps," American Economic Review, American Economic Association, vol. 97(4), pages 1467-1487, September.
    11. Denis Anne, 2019. "Aides à la mobilité et insertion sociale," Erudite Ph.D Dissertations, Erudite, number ph19-03 edited by Yannick L'Horty.
    12. Steven N. Durlauf & Yannis M. Ioannides, 2010. "Social Interactions," Annual Review of Economics, Annual Reviews, vol. 2(1), pages 451-478, September.
    13. Delia Furtado & Nikolaos Theodoropoulos, 2012. "Immigrant Networks and the Take-Up of Disability Programs: Evidence from US Census Data," University of Cyprus Working Papers in Economics 09-2012, University of Cyprus Department of Economics.
    14. 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.
    15. Damm, Anna Piil, 2014. "Neighborhood quality and labor market outcomes: Evidence from quasi-random neighborhood assignment of immigrants," Journal of Urban Economics, Elsevier, vol. 79(C), pages 139-166.
    16. Bezin, Emeline & Moizeau, Fabien, 2017. "Cultural dynamics, social mobility and urban segregation," Journal of Urban Economics, Elsevier, vol. 99(C), pages 173-187.
    17. Francis Kramarz & Oskar Nordström Skans, 2014. "When Strong Ties are Strong: Networks and Youth Labour Market Entry," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 81(3), pages 1164-1200.
    18. Ha Trong Nguyen & Huong Thu Le & Luke B Connelly, 2021. "Who's declining the “free lunch”? New evidence from the uptake of public child dental benefits," Health Economics, John Wiley & Sons, Ltd., vol. 30(2), pages 270-288, February.
    19. Claudia Olivetti & Eleonora Patacchini & Yves Zenou, 2020. "Mothers, Peers, and Gender-Role Identity," Journal of the European Economic Association, European Economic Association, vol. 18(1), pages 266-301.
    20. John A. List & Fatemeh Momeni & Yves Zenou, 2020. "The Social Side of Early Human Capital Formation: Using a Field Experiment to Estimate the Causal Impact of Neighborhoods," Working Papers 2020-187, Becker Friedman Institute for Research In Economics.

    More about this item

    Keywords

    welfare-to-work transitions; neighbourhood effects; diversity; block-level data;
    All these keywords.

    JEL classification:

    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:irs:cepswp:2021-05. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Library and Documentation (email available below). General contact details of provider: https://edirc.repec.org/data/cepsslu.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.