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Neighborhood Signaling Effects, Commuting Time, and Employment: Evidence from a Field Experiment

Author

Listed:
  • Carlsson, Magnus

    (Linnaeus University)

  • Abrar Reshid, Abdulaziz

    (Linnaeus University)

  • Rooth, Dan-Olof

    (Stockholm University)

Abstract

The question of whether and how living in a deprived neighborhood affects the labor market outcomes of its residents has been a subject of great interest for both policy makers and researchers. Despite this interest, empirical evidence of causal neighborhood effects on labor market outcomes is scant, and causal evidence on the mechanisms involved is even more scant. The mechanism that this study investigates is neighborhood signaling effects. Specifically, we ask whether there is unequal treatment in hiring depending on whether a job applicant signals living in a bad (deprived) neighborhood or in a good (affluent) neighborhood. To this end, we conducted a field experiment where fictitious job applications were sent to employers with an advertised vacancy. Each job application was randomly assigned a residential address in either a bad or a good neighborhood. The measured outcome is the fraction of invitations for a job interview (the callback rate). We find no evidence of general neighborhood signaling effects. However, job applicants with a foreign background have callback rates that are 42 percent lower if they signal living in a bad neighborhood rather than in a good neighborhood. In addition, we find that applicants with commuting times longer than 90 minutes have lower callback rates, and this is unrelated to the neighborhood signaling effect. Apparently, employers view information about residential addresses as important for employment decisions.

Suggested Citation

  • Carlsson, Magnus & Abrar Reshid, Abdulaziz & Rooth, Dan-Olof, 2018. "Neighborhood Signaling Effects, Commuting Time, and Employment: Evidence from a Field Experiment," IZA Discussion Papers 11284, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp11284
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    References listed on IDEAS

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    Cited by:

    1. Hannah Van Borm & Louis Lippens & Stijn Baert, 2022. "An Arab, an Asian, and a Black guy walk into a job interview: ethnic stigma in hiring after controlling for social class," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 22/1054, Ghent University, Faculty of Economics and Business Administration.
    2. Diaz, Ana Maria & Salas, Luz Magdalena, 2020. "Do firms redline workers?," Regional Science and Urban Economics, Elsevier, vol. 83(C).
    3. Van Borm, Hannah & Burn, Ian & Baert, Stijn, 2021. "What Does a Job Candidate's Age Signal to Employers?," Labour Economics, Elsevier, vol. 71(C).
    4. Gustafsson, Björn Anders & Katz, Katarina & Österberg, Torun, 2020. "Social Assistance Receipt among Young Adults Grown up in Different Neighbourhoods of Metropolitan Sweden," IZA Discussion Papers 12880, Institute of Labor Economics (IZA).
    5. Van Borm, Hannah & Baert, Stijn, 2022. "Diving in the Minds of Recruiters: What Triggers Gender Stereotypes in Hiring?," IZA Discussion Papers 15261, Institute of Labor Economics (IZA).
    6. Hannah Van Borm & Louis Lippens & Stijn Baert, 2022. "An Arab, an Asian, and a Black guy walk into a job interview: ethnic stigma in hiring after controlling for social class," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 22/1054, Ghent University, Faculty of Economics and Business Administration.
    7. Brian Asquith & Judith K. Hellerstein & Mark J. Kutzbach & David Neumark, 2021. "Social capital determinants and labor market networks," Journal of Regional Science, Wiley Blackwell, vol. 61(1), pages 212-260, January.
    8. Sylvain Chareyron & Laetitia Challe & Yannick L’Horty & Pascale Petit, 2022. "Can subsidies paid directly to employers reduce residential discrimination in employment? An assessment based on serial field experiments," Urban Studies, Urban Studies Journal Limited, vol. 59(6), pages 1202-1218, May.

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    More about this item

    Keywords

    neighborhood signaling effects; neighborhood stigma; commuting time; discrimination; field experiment; correspondence study;
    All these keywords.

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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