The Neighbourhood is Not What it Used to Be

23 Pages Posted: 8 May 2006

See all articles by Oddbjorn Raaum

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

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Abstract

Using a variance decomposition framework that bounds the effect of families and neighbourhoods, we find important effects of family characteristics and residential location on adult education and 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. 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 US.

Suggested Citation

Raaum, Oddbjørn and Salvanes, Kjell G. and Sørensen, Erik Ø., The Neighbourhood is Not What it Used to Be. Economic Journal, Vol. 116, No. 508, pp. 200-222, January 2006. Available at SSRN: https://ssrn.com/abstract=878194 or http://dx.doi.org/10.1111/j.1468-0297.2006.01053.x

Oddbjørn Raaum (Contact Author)

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

Gaustadalleen 21
N-0317 Oslo
Norway

Kjell G. Salvanes

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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