Neighbourhoods, networks and unemployment: The role of neighbourhood disadvantage and local networks in taking up work

Abstract

We bring together research on social networks and neighbourhood disadvantage to examine how they jointly affect unemployed individuals’ probability of re-entering employment. Data from the UK Household Longitudinal Study ‘Understanding Society’ provide information on the proportion of friends who live in the same neighbourhood, and are linked with small-scale administrative information on neighborhood employment deprivation. Results indicate that neighbourhood employment deprivation prolongs unemployment, but only for individuals who report that all of their friends live in the same neighbourhood. Living in an advantaged neighbourhood with all of one’s friends in the neighbourhood increases the chances of exiting unemployment. In contrast, neighbourhood location is not associated with unemployment exit if one’s friends do not live in the same neighbourhood. We conclude that neighbourhood effects on exiting unemployment critically depend on individuals’ social embeddedness in the neighbourhood. Not just residing in a disadvantaged neighbourhood, but actually living there with all one’s friends, prevents individuals from re-entering employment. This opens new avenues for theorising neighbourhood effects as social rather than geographic phenomena, and highlights that the effects of neighbourhood socio-economic characteristics are conditional on the level of interaction residents have within their neighbourhood.