Neighbourhood attributes and unemployment duration A French empirical analysis

This paper investigates the relationship between three town attributes (unemployment rate, part of individuals without a diploma and tax potential) and the duration of unemployment-to-work transitions (duration before having an employment-no matter its nature- and duration before having a permanent contract). These attributes are proxies for town deprivation. As individuals are not randomly distributed among towns, we identify an endogeneity bias problem. In order to control for this bias, we implement two-stage least squares estimations and duration models. We work with a final sample of more than 6 500 individuals obtained from the matching of four databases. We show that living in a deprived neighborhood increases the duration to find a job.