Income Increase and Moving to a Better Neighbourhood: An Enquiry into Ethnic Differences in Finland

21 Pages Posted: 23 Oct 2017

See all articles by Maria Vaalavuo

Maria Vaalavuo

Government of the Republic of Finland - National Institute for Health and Welfare

Maarten van Ham

Delft University of Technology - OTB Research Institute for Housing, Urban and Mobility Studies; University of St. Andrews; IZA Institute of Labor Economics

Timo Kauppinen

Government of the Republic of Finland - National Institute for Health and Welfare

Abstract

Concentration to disadvantaged neighbourhoods may hinder immigrants' opportunities for social integration, so equal chances of translating available economic resources into mobility to less disadvantaged neighbourhoods are important. This paper adds to existing research on exits from poor neighbourhoods by focusing on the effects of income increase on residential mobility. We analyse intra-urban residential mobility from low-income neighbourhoods into non-low-income neighbourhoods among immigrants and native-born residents in three urban regions in Finland. We use longitudinal register data for the 2004–2014 period for the full Finnish population, allowing a dynamic analysis of changes in income and neighbourhood of residence. Based on multinomial logit modelling of migration outcomes, we found that an increase in income is associated with moving both to low-income and non-low-income areas even when controlling for initial income level. Upward income mobility was connected to exit from low-income areas in a quite similar way among immigrants and native-born Finns. The findings suggest that policies e.g. improving the labour market opportunities of immigrants are effective in reduction of residential segregation. However, we were not able to completely explain the differences between native-born Finns and immigrants in moving patterns. The differences between the cities were opposite for immigrants and native-born Finns, corresponding to differences in immigration history and levels of ethnic segregation. Therefore, the local context matters for spatial integration outcomes.

Keywords: immigration, segregation, housing, residential mobility, income mobility, register data, Finland

JEL Classification: O15, O18, P25, R23

Suggested Citation

Vaalavuo, Maria and van Ham, Maarten and Kauppinen, Timo, Income Increase and Moving to a Better Neighbourhood: An Enquiry into Ethnic Differences in Finland. IZA Discussion Paper No. 11076. Available at SSRN: https://ssrn.com/abstract=3056614

Maria Vaalavuo (Contact Author)

Government of the Republic of Finland - National Institute for Health and Welfare

Maarten Van Ham

Delft University of Technology - OTB Research Institute for Housing, Urban and Mobility Studies ( email )

P.O. Box 5043
2600 GA Delft
Netherlands
+31 15 278 2782 (Phone)

HOME PAGE: http://www.maartenvanham.nl

University of St. Andrews ( email )

North St
Saint Andrews, Fife KY16 9AJ
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Timo Kauppinen

Government of the Republic of Finland - National Institute for Health and Welfare

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