Neighbourhood Effects and Social Mobility: A Longitudinal Analysis

What impact do neighbourhoods have on social mobility? For years, this question has received widespread international attention in scholarly debates and within society at large. This paper seeks to contribute to this discussion by presenting the results of an investigation into the relationship between household social mobility and the composition of the residential environment. The analyses are based on an extensive empirical longitudinal study conducted in the Netherlands. The most remarkable conclusion is that, in the Dutch context, the environment has only a modest influence on the social mobility of households with a weak economic position. It was found that the chance of a household living purely on welfare benefits at the beginning of the study period to escape the ‘welfare trap’ was barely dependent on the number of similarly challenged households in the immediate vicinity. Interestingly, the environment proved to have a more powerful effect on the social mobility of households with a stronger economic position. The probability that households with at least one paid job at the beginning of the research would still have a job at the end clearly decreases as the share of benefit-dependent households in the neighbourhood rises. A possible explanation for this is that for the first category (weak starting position) the negative effect of their own welfare situation is far more determinative for their future prospects than the composition of their environment. Because these negative individualistic conditions are absent for the second category (stronger starting position), environmental factors may play a relatively larger role. Another interpretation is that area-based policies are not just targeting the areas with bigger problems more intensively, but especially the long-term unemployed in these areas, and not so much the short-term unemployed (those who had a job at the start of the research period and lost the job afterwards).