Abstract
In this article, we study whether individuals who reside in segregated neighborhoods in Sweden have lower propensity to be employed. We employ full population micro-data, which allow us to follow the same group of individuals over 21 years and make it possible to apply an individual fixed effects strategy to reduce issues of self-selection and individual heterogeneity. The results show that individuals in segregated neighborhoods are less likely to be employed compared to individuals living in non-segregated neighborhoods. This observation is most significant in metropolitan regions. Furthermore, the relationship appears to be particularly attributed to males of foreign background. However, it is not the spatial separation between immigrants and natives that lies behind the negative relationship between segregation and employment, but rather the distress of neighborhoods.
Highlights
Sweden has received a large number of immigrants over the last decades
Residing in socioeconomically weak neighborhoods seems to pose barriers for labor integration, which may be challenging for individuals who are already disadvantaged in the labor market
Due to access to Swedish full population micro-data, we can follow the same individuals for 21 years
Summary
Sweden has received a large number of immigrants over the last decades. The accumulative immigration in Sweden the past three decades is equal to around one-fourth of the current population. The positive side of segregation springs mostly from social networks between individuals belonging to certain groups, based on, for example, common ethnic origin. A common measure of segregation used in empirical studies is the dissimilarity index (see, for example, Tauber and Tauber 1965; Cutler and Glaeser 1997; Cutler et al 1999; Aldén et al 2015), which dates back to Hoover (1941). This index measures how minority and majority group individuals are distributed across sub-areas, such as neighborhoods of a region. The dissimilarity index is based on the distribution of minority and majority group individuals across parishes (which represent neighborhoods) within labor market regions. Individuals born in Sweden with at least one native-born parent are categorized in the majority group
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