Bo Malmberg - Stockholm University
In the U.S. several studies have convincingly demonstrated that disadvantaged neighborhoods can negatively influence the income careers of underprivileged groups. We are now able to extend these findings through an analysis of data from Sweden - a country with a well-developed Nordic type, welfare state. Growing up in an area where a high share of neighboring families are poor increases a person’s risk of being poor as an adult. Conversely, if a person’s neighbors when s/he is school-age are affluent then this will promote that person’s chances of becoming well-off in adulthood. These results hold even if the effect of family background factors such as parent’s education, income, or having a single mother are considered. An innovative feature of the study is that the nearest neighbors of each individual has been identified using anonymized, geo-coded, register data. This allows for a more precise measurement of residential context and it is a possible explanation for the clear-cut results obtained.
Another important finding in the study is that segregation is most pronounced in the largest metropolitan regions of Sweden but less severe in medium sized and small cities. Since differences in social composition are smaller, parents in non-metropolitan areas need to worry less over selecting the best residential neighborhoods. In highly segregated metropolitan area differences in the impact on life chances can be substantial. This could help explain why some families in the largest cities choose to buy houses in the most expensive areas.
A central message from this paper is that policy-makers should be concerned if there is an increase in residential segregation. In highly segregated societies, children of high income parents will have a double advantage. Coming from an elite family will increase their educational opportunities and provide them with career-promoting social networks. Growing up in an elite neighborhood will add to this advantage. In less segregated societies there will instead be some equalization of life chances since the experience of growing up in average neighborhoods will be more widely shared.
From a theoretical point of view an important contribution of this paper is that the use of geo-coded data has made it possible to isolate the effects of different types of neighborhood influences, for example, living in neighborhoods with many foreign born, single-family house neighborhoods, elite neighborhoods, and economically disadvantaged neighborhoods. In earlier studies this has been difficult since many socio-economic variables are highly correlated at the local level. However, be using geo-coded data this difficulty can be overcome by taking advantage of the fact that correlation patterns look different at different spatial scales.
This paper, thus, demonstrate that studies of neighborhood effects can be benefit a lot both from an increasing availability of geo-coded data and the increased processing speed of modern computers. Scientific advances have often been spurred by technological advances that give researchers access to better measurements and better data. Therefore, it cannot be excluded that the coming years will bring further increases in our understanding of how geographical context influences individual level outcomes.