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NEIGHBOURHOOD COMPOSITION AND ECONOMIC PROSPECTS: A LONGITUDINAL STUDY IN THE NETHERLANDS

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ABSTRACT

‘How does the “social” and “cultural” neighbourhood composition impact on the economic prospects of its inhabitants?’ We addressed this question, while using a new longitudinal dataset. We analysed the individual income changes between 1999 and 2005 of all Dutch 18–49 year-olds (subdivided in four strata) who stayed in the same neighbourhood throughout the period while focusing on the role of neighbourhood after controlling for a range of individual variables. The impact of neighbourhood contexts is statistically significant, yet limited compared to the impact of individual characteristics. Social context – neighbourhood median income and income mix – turned out to be most relevant in terms of neighbourhood impact. Higher median incomes and more income mix in the neighbourhood have significant positive effects on individual income development.

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