Neighborhood Effects and Individual Unemployment
Thomas K. Bauer
Rhine-Westphalia Institute for Economic Research (RWI-Essen); University of Bochum - Faculty of Economics; Institute for the Study of Labor (IZA)
Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI Essen); Institute for the Study of Labor (IZA)
Rhine-Westphalia Institute for Economic Research (RWI-Essen)
September 1, 2011
Using a unique dataset for Germany that links individual longitudinal data from the GSOEP to regional data from the federal employment agency and data of real estate prices, we evaluate the impact of neighborhood unemployment on individual employment prospects. The panel setup and richness of the data allows us to overcome some of the identification problems which are present in this strand of literature. The empirical results indicate that there is a significant negative impact of neighborhood unemployment on the individual employment probability.
Number of Pages in PDF File: 42
Keywords: Social interactions, unemployment, neighborhood characteristics
JEL Classification: J65, R23working papers series
Date posted: September 27, 2011
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