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The neighbourhood is not what it used to be
By Raaum, Oddbjørn, Kjell G. Salvanes and Erik Ø. Sørensen
2006
Economic Journal, 116 (January), 278-300
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Abstract |
Parents in fence their children's adult outcomes through economic and genetic
endowments, transmission of cultural values and social skills, and through choice
of residential location. Using a variance decomposition framework which provides
bounds on the e ect of families and neighbourhoods, we nd important e ects
of family characteristics as well as residential location on educational attainment
and adult earnings in Norway. Families are more important than neighbourhoods
as the correlations among siblings are signi cantly higher than among children
growing up in the same local community. Sibling correlations are estimated
to be a little lower than for the US, while correlations between neighbourhood
children in Norway are found to be signi cantly weaker than in the US. Unlike
previous studies, we also assess changes over time by studying children growing
up around 1960 and 1970. While family e ects are permanent over time, the
impact of neighbourhoods is reduced by half in size from 1960 to 1970 and we
link this result to several policy changes in the 1960s aimed at increasing equality
of opportunity in Norway. Our results di er from previous US studies, suggesting
that the role of families and neighbourhoods in explaining the degree of equality
of opportunity and social mobility depends on labour market institutions and
redistributive policies. |
| JEL Classification:
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I21, J13, R23 |
| Keywords:
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Education, Children, Neighbours, Siblings, Local Institutions, Peer-effects |
| Project:
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1101 Qualifications, education, and productivity
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| Financing:
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Norges forskningsråd |
| Contact:
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oddbjorn.raaum@frisch.uio.no |
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