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The Neighbourhood Is Not What It Used to Be

  • Raaum, Oddbjørn


    (Ragnar Frisch Centre for Economic Research)

  • Salvanes, Kjell G.


    (Norwegian School of Economics)

  • Sørensen, Erik Ø.


    (Norwegian School of Economics)

Using a variance decomposition framework which provides bounds on the effect of families and neighbourhoods, we find important effects of family characteristics and residential location on educational attainment and adult earnings in Norway. Neighbourhoods are less important than families, as the correlations among siblings are significantly higher than among children growing up in the same local community. The impact of neighbourhoods is reduced by half from 1960 to 1970 and we link this result to several policy changes in the 1960s aimed at increasing equality of opportunity in Norway. Neighbour correlations in Norway are found to be significantly lower than in the United States.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 952.

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Length: 35 pages
Date of creation: Dec 2003
Date of revision:
Publication status: published in: Economic Journal, 2006, 116 (508), 200-222
Handle: RePEc:iza:izadps:dp952
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  1. Ermisch, John & Francesconi, Marco, 2001. "Family Matters: Impacts of Family Background on Educational Attainments," Economica, London School of Economics and Political Science, vol. 68(270), pages 137-56, May.
  2. Haegeland, Torbjorn & Klette, Tor Jakob & Salvanes, Kjell G, 1999. " Declining Returns to Education in Norway? Comparing Estimates across Cohorts, Sectors and Over Time," Scandinavian Journal of Economics, Wiley Blackwell, vol. 101(4), pages 555-76, December.
  3. Aakvik, Arild & Salvanes, Kjell G. & Vaage, Kjell, 2003. "Measuring Heterogeneity in the Returns to Education in Norway Using Educational Reforms," Working Papers in Economics 08/03, University of Bergen, Department of Economics.
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  17. repec:oup:qjecon:v:114:y:1999:i:2:p:577-599 is not listed on IDEAS
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