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The Neighbourhood Is Not What It Used to Be

35 Pages Posted: 12 Jan 2004  

Oddbjorn Raaum

University of Oslo - Ragnar Frisch Centre for Economic Research

Kjell G. Salvanes

Norwegian School of Economics (NHH) - Department of Economics; IZA Institute of Labor Economics

Erik Ø. Sørensen

Norwegian School of Economics (NHH) - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: December 2003

Abstract

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.

Keywords: education, earnings, neighbours, families, peer-effects

JEL Classification: I21, J13, R23

Suggested Citation

Raaum, Oddbjorn and Salvanes, Kjell G. and Sørensen, Erik Ø., The Neighbourhood Is Not What It Used to Be (December 2003). IZA Discussion Paper No. 952. Available at SSRN: https://ssrn.com/abstract=480027

Oddbjørn Raaum

University of Oslo - Ragnar Frisch Centre for Economic Research ( email )

Gaustadalleen 21
N-0317 Oslo
Norway

Kjell G. Salvanes (Contact Author)

Norwegian School of Economics (NHH) - Department of Economics ( email )

Helleveien 30
N-5035 Bergen
Norway
+47 5 595 9315 (Phone)
+47 5 595 9543 (Fax)

IZA Institute of Labor Economics

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

Erik Ø. Sørensen

Norwegian School of Economics (NHH) - Department of Economics ( email )

Helleveien 30
N-5035 Bergen
Norway
+47 55 95 92 81 (Phone)
+47 55 95 95 43 (Fax)

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