Concentration effects, spatial mismatch, or neighborhood selection? Exploring labor market and neighborhood variations in male unemployment risk using census microdata from Great Britain

Abstract

A classification of census enumeration districts has recently been added to the 1991 British Census 2% Sample of Anonymised Records (SAR). Through the use of multilevel modeling techniques, the area classification information on the SAR is used to investigate geographical differences in unemployment. Previous research has indicated that where a person lives can affect their propensity to unemployment. However, the understanding of these relationships are confounded by the reciprocal nature of the relationship between unemployment, housing, and geographical location. This paper examines the relative importance of the individual, the type of neighborhood of residence, and the local labor market in which one lives in explaining variations in unemployment risk. It also examines the role of housing tenure at an individual and contextual level in mediating this relationship. Two competing hypotheses are evaluated. The first is that local concentrations of unemployment are the result of the process of neighborhood selection. The other suggests there are contextual affects on unemployment risk, which may include access to job opportunities and "concentration effects." The paper concludes that most neighborhood level variation in unemployment is due to housing market effects, particularly neighborhood selection. As well as offering insights into the relationship between unemployment and geographical location, this paper aims to demonstrate methodological innovations in the analysis of census microdata. In particular it shows how area classifications can be used in conjunction with microdata in a multilevel modeling framework, to get a better understanding of the role of individual and contextual factors in social processes.