Who Is Affected by Neighbourhood Income Mix? Gender, Age, Family, Employment and Income Differences

Abstract

This paper analyses the degree to which the mixture of low-, middle- and high-income males in the neighbourhood affects the subsequent earnings of individuals, and aims to test explicitly the degree to which these impacts vary across gender, age, presence of children, employment status or income at the start of the analysis period. An intertemporal differences specification of an econometric model is employed to eliminate the potential selection bias arising from unmeasured individual characteristics, utilising data on 1.67 million adults living in Swedish metropolitan areas 1991—99. It is found that there are important differences in the nature and magnitude of neighbourhood income mix effects in several dimensions, but many are statistically and economically significant. Neighbourhood mix effects are consistently stronger for parents and those who do not work full-time, independently of other individual dimensions, although a combination of personal attributes typically governs the vulnerability of the individual to the neighbourhood.