Segregation and individual employment: a longitudinal study of neighborhood effects

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.