DP4611 Neighbourhoods, Households and Income Dynamics: A Semi-Parametric Investigation of Neighbourhood Effects

Author(s): Anne Bolster, Simon Burgess, Ron Johnston, Kelvyn Jones, Carol Propper, Rebecca Sarker
Publication Date: September 2004
Keyword(s): income dynamics, neighbourhood effects, small scale neighbourhoods
JEL(s): D31, I30
Programme Areas: Labour Economics, Public Economics
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=4611

Using a unique dataset, we present evidence on income trajectories of people living in micro neighbourhoods. We place bounds on the influence of neighbourhood making as few parametric assumptions as possible. The Paper offers a number of advances. We exploit a dataset that is large, representative, longitudinal with very local neighbourhoods. We analyse income growth over one, five- and ten-year windows. We analyse the whole distribution of income growth and track large gainers and losers as well as average outcomes. We consider the appropriate definition of neighbourhood. We find little evidence of a negative relationship between neighbourhood and subsequent income growth.