Sorting Out Neighbourhood Effects Using Sibling Data

28 Pages Posted: 5 Dec 2017

See all articles by Lina Hedman

Lina Hedman

Uppsala University

David Manley

University of St. Andrews

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

Abstract

Previous research has reported evidence of intergenerational transmission of both neighbourhood status and social and economic outcomes later in life; parents influence where their children live as adults and how well they do later in life in terms of their income. However, interactions between the individual, the childhood family and neighbourhood context and the neighbourhood experiences after leaving the parental home are often overlooked which might bias estimates of neighbourhood effects. It is likely that part of the effects attributed to neighbourhoods, are actually effects of the family in which someone was brought up.This study uses a sibling design to disentangle family and neighbourhood effects on income, and synthetic sibling pairs are used as a control group. The sibling design allows us to separate the effects of childhood family and neighbourhood contexts, but also between childhood neighbourhood effects and effects of the adult neighbourhood experiences. Using data from Swedish registers we show that the neighbourhood effect from both childhood and adult neighbourhood exposure is biased upwards by the influence of the family context. This leads to the conclusion that part of what appeared to be a neighbourhood effect was in fact a lasting "family effect". Interestingly, we find that there is a long lasting effect of the family context on income later in life, and that this effect is strong regardless the individual neighbourhood pathway later in life.

Keywords: neighbourhood effects, non-random sorting, siblings, family, income, longitudinal data

JEL Classification: I30, J60, R23

Suggested Citation

Hedman, Lina and Manley, David and van Ham, Maarten, Sorting Out Neighbourhood Effects Using Sibling Data. IZA Discussion Paper No. 11178, Available at SSRN: https://ssrn.com/abstract=3081412

Lina Hedman (Contact Author)

Uppsala University ( email )

Box 513
Uppsala, 751 20
Sweden

David Manley

University of St. Andrews ( email )

North St
Saint Andrews, Fife KY16 9AJ
United Kingdom

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

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