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).