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Neighborhood Effects, Public Housing and Unemployment in France

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  • Claire Dujardin
  • Florence Goffette-Nagot

Abstract

This paper is aimed to examine how individual unemployment is influenced both by location in a deprived neighborhood and public housing. Of course, measuring neighborhood effects raises the issue of location choice endogeneity, which generates correlated effects (Moffitt, 2001; Durlauf, 2004). Indeed, individuals with similar socio-economic characteristics, labor-market outcomes, and unobservable traits tend to sort themselves into certain parts of the urban space. In this paper, we investigate the possibility to deal with endogeneity of location choices by means of a non-linear model, that offers conditions under which group effects may be identified (Brock, Durlauf, 2003 and 2004). Specifically, in a preliminary data analysis step, we classify neighborhoods as deprived or not deprived and then estimate a simultaneous probit model of (i) public housing accommodation, (ii) type of neighborhood, and (iii) unemployment, allowing for non-zero correlations between the error terms of the three equations. The large share of public housing units in France and their concentration in poor neighborhoods, where they may represent as much as two thirds of housing units, allow us to use public housing accommodation as a powerful determinant of location in these neighborhoods. Estimations of this simultaneous probit model by simulated maximum likelihood are performed on a sample of approximately 10,000 individuals, taken from the 1999 French Census and representing about five percents of households' heads participating in the labor-market in Lyon, the third largest city in France. Our results show that public housing does not have any direct effect on unemployment. However, living within the 35% more deprived neighborhoods does increase the unemployment probability significantly. Our estimate is comparable to that Topa (2001) obtained for Chicago. As expected, the effect of neighborhood substantially decreases when dealing with the endogeneity of neighborhood and when using public housing as a determinant of neighborhood choice.

Suggested Citation

  • Claire Dujardin & Florence Goffette-Nagot, 2006. "Neighborhood Effects, Public Housing and Unemployment in France," ERSA conference papers ersa06p362, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa06p362
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    Cited by:

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    3. Thomas K. Bauer & Michael Fertig & Matthias Vorell, 2011. "Neighborhood Effects and Individual Unemployment," SOEPpapers on Multidisciplinary Panel Data Research 409, DIW Berlin, The German Socio-Economic Panel (SOEP).
    4. Thomas K. Bauer & Michael Fertig & Matthias Vorell, 2011. "Neighborhood Eff ects and Individual Unemployment," Ruhr Economic Papers 0285, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    5. Harris Selod & Laurent Gobillon, 2007. "Les déterminants locaux du chômage en région parisienne," Économie et Prévision, Programme National Persée, vol. 180(4), pages 19-38.
    6. Ng, Matthew Kok Ming & Roper, Josephine & Pettit, Christopher & Lee, Chyi Lin, 2021. "The Reflection of Income Segregation and Accessibility Cleavages in Sydney’s House Prices," SocArXiv 2psk5, Center for Open Science.
    7. Nicolas Renahy & Bertrand Schmitt, 2005. "Introduction - Travail et territoires," Post-Print hal-01201104, HAL.
    8. Benoît Schmutz, 2015. "Spatial sorting of African Immigrants in the French Public Housing Market," The Review of Black Political Economy, Springer;National Economic Association, vol. 42(3), pages 247-270, September.
    9. Renahy, Nicolas & Schmitt, Bertrand, 2005. "Introduction - Travail et territoires," Cahiers d'Economie et de Sociologie Rurales (CESR), Institut National de la Recherche Agronomique (INRA), vol. 76.
    10. repec:zbw:rwirep:0285 is not listed on IDEAS
    11. Petrović, Ana & Manley, David & van Ham, Maarten, 2018. "Freedom from the Tyranny of Neighbourhood: Rethinking Socio-Spatial Context Effects," IZA Discussion Papers 11416, Institute of Labor Economics (IZA).

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    More about this item

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis

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