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Neighbourhood Effects, Housing Tenure, and Individual Employment Outcomes

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  • Manley, David

    () (University of Bristol)

  • van Ham, Maarten

    () (Delft University of Technology)

Abstract

This paper investigates whether individuals living in neighbourhoods with high concentrations of unemployment are less likely to enter work if they are unemployed and more likely to lose their job if they are employed. The main challenge in the neighbourhood effects literature is the identification of causal neighbourhood effects. A particular problem is that individuals do not randomly select neighbourhoods to live in: the selection process is often linked to the labour market situation and potential of individuals. To get more insight in neighbourhood effects we run separate models for social renters and owner occupiers. This study uses anonymised individual level longitudinal data from the Scottish Longitudinal Study for 1991 and 2001 with multiple neighbourhood scales operationalised. Based on the results we argue that any apparent neighbourhoods effects that were present in models of the full population are at least partly an artefact of different neighbourhood selection mechanisms. The conclusions of the paper call for a more nuanced treatment of neighbourhood effects and the development of models that seek to include neighbourhood selection from the outset.

Suggested Citation

  • Manley, David & van Ham, Maarten, 2010. "Neighbourhood Effects, Housing Tenure, and Individual Employment Outcomes," IZA Discussion Papers 5271, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp5271
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    References listed on IDEAS

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    1. 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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    Keywords

    neighbourhood deprivation; longitudinal data; neighbourhood effects; labour market outcomes; Scotland;

    JEL classification:

    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • 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

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