Neighbourhood effects, housing tenure, and individual employment outcomes

Manley, D. & van Ham, M. (2011) In van Ham, M, Manley, D, Bailey, N, Simpson, L & Maclennan, D. (eds). 'Neighbourhood Effects Research: New Perspectives' Chapter 7, pp147-174. Springer, Dordrecht. ISBN: 978-94-007-2309-2 [SLS]

Other information:

There are a number of serious shortcomings in much of the existing neighbourhood effects literature, most notably selection bias. As a result, many existing studies are likely to show correlations between individual outcomes and neighbourhood characteristics, instead of real causal effects. The empirical section of this chapter investigates whether the level of unemployment in a neighbourhood is related to the employment outcomes of residents. The study uses data from the Scottish Longitudinal Study (SLS) and estimates the probability that an unemployed person in 1991 has a job in 2001, and the probability than an employed person in 1991 remains in employment by 2001. The models clearly show a correlation between neighbourhood characteristics and individual employment outcomes. However, separate models by housing tenure show that these correlations are significant only for homeowners, and not for social renters. It is argued that this can be explained by selection bias for homeowners, which was largely absent for social renters. The main conclusion of the chapter is that (self-) selection should be more fully explored in studies of neighbourhood effects. Wherever possible, models investigating the impact of neighbourhood contexts on individual outcomes should take into account the different routes through which households enter neighbourhoods.

Available online: 'Neighbourhood Effects Research: New Perspectives'
Output from project: 2007_006


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