Ruhr Economic Papers

Ruhr Economic Papers #285

Neighborhood Effects and Individual Unemployment

by Thomas K. Bauer, Michael Fertig and Matthias Vorell

RWI, RUB, 09/2011, 40 S./p., 8 Euro, ISBN 978-3-86788-331-3



Using a unique dataset for Germany that links individual longitudinal data from the GSOEP to regional data from the federal employment agency and data of real estate prices, we evaluate the impact of neighborhood unemployment on individual employment propects. The panel setup and richness of the data allows us to overcome some of the identification problems which are present in this strand of literature. The empirical results indicate that there is a significant negative impact of neighborhood unemployment on the individual employment probability.

JEL-Classification: J65, R23

Keywords: Social interactions; unemployment; neighborhood characteristics