Is the Neighbourhood Effect an Economic or an Immigrant Issue? A Study of the Importance of the Childhood Neighbourhood for Future Integration into the Labour Market

The purported effects of concentrations of immigrants and poverty within cities on inclusion in the labour market are intensively discussed among politicians and researchers. This study uses a multilevel approach to analyse a large longitudinal dataset in Stockholm. The results confirm previous research that concludes that only a small fraction of socioeconomic output can be considered to be a result of neighbourhood origin. Moreover, it is concluded that economic characteristics of neighbourhoods have a larger impact than ethnic ones. Growing up in a wealthy area adds to the risk of having a low income at 24 and 25 years of age, but growing up in a poor area adds to the risk of being unemployed.