Occupational mobility and neighbourhood effects: a longitudinal study

1. Centre for Housing Research University of St Andrews Occupational mobility and neighbourhood effects: a longitudinal study Dr David Manley & Dr Maarten van Ham ESRC Seminar Series – 4 & 5 February 2010

2. Neighbourhood Effects • There is a strong belief in neighbourhood effects: the assumed negative effect of living in deprived neighbourhoods – above and beyond the effect of individual characteristics – on resident’s health, employment and general well-being. • Many policy documents – including the Firm Foundations document from the Scottish Government - highlight the correlation between concentrations of deprivation (and social housing) and negative outcomes (such as unemployment)

3. The evidence? • Research consistently shows that neighbourhoods with high levels of deprivation have higher levels of unemployment, crime, and long term limiting illness. • Research also shows that individuals in neighbourhoods with high concentrations of deprivation are more likely to be unemployed and suffer from poorer health.

4. But… “There is surprisingly little evidence that living in poor neighbourhoods makes people poorer and erodes their life chances, independently of those factors that contribute to their poverty in the first place.” (Paul Cheshire, JRF, 2007) “do poor people live in poor neighbourhoods because living in affluent ones costs too much? Or does living in a poor neighbourhood make poor people significantly poorer?” (Paul Cheshire, JRF, 2007)

5. Problems with many existing studies on neighbourhood effects • Ecological fallacy • Analyses at the level of neighbourhoods do not necessarily say anything useful about processes at the individual level. • Most analyses are cross sectional • Most studies only show correlations and no causation. Existing evidence is most likely reversed causality. • Existing longitudinal studies show no evidence of neighbourhood effects or benefits from deconcentrating poverty.

6. Our contribution to the literature • Individual level analysis (avoids the ecological problem). • Use of longitudinal data from the Scottish Longitudinal Study (SLS), allowing us to follow individuals over a 10-year period (avoiding the cross sectional problem). • Advantages of using the SLS: • Large-scale data set: 5.3% sample of the Scottish population based on 1991 and 2001 individual census records • Low spatial level geo-coding allowing researchers to link neighbourhood characteristics to individual records.

7. Research Question • Research suggests individuals in deprived neighbourhoods are less likely to achieve occupational mobility than individuals in non-deprived neighbourhoods • Question: To what extent does the neighbourhood deprivation influence occupational mobility?

8. Research design • Model whether the 1991 neighbourhood deprivation influences the improvement in occupational status for an individual between 1991 and 2001 • Controlling for neighbourhood & individual & household characteristics.

9. Causality • Important to realise that we use 1991 data to measure 2001 outcome. • For instance: • 1991 Education • 1991 Neighbourhood • 1991 Tenure. • Also include 1991-2001 change variables: • 1991 compared to 2001 Household Status • 1991 compared to 2001 Health.

10. Definition of Neighbourhood • Output Areas • 119 people on average • Consistent Areas Through Time • 550 people on average. • Deprivation from Carstairs index, in quintiles • 1 least deprived, • 5 most deprived

11. ISEI • International Socio-economic Index of Occupational Status • Continuous measurement. • ISEI 16 = Cleaners and Domestic helpers • ISEI 29 = Coffee shop barista • ISEI 45 = Tailor or dressmaker • ISEI 52 = Travel agency clerk • ISEI 65 = Social science professionals • ISEI 90 = Judges

13. Analysis Occupational mobility, 1991 - 2001

14. OA

15. OA

16. OA

17. OA

18. OA

19. CATT

20. Some (initial) conclusions • The initial negative effect of a high level of deprivation on occupational mobility outcomes reduces when controlling, individual educational achievement, household circumstances and tenure. • What remains is a (small but significant) negative effect of living in a deprived neighbourhood on occupational mobility outcomes • The neighbourhood effects are relatively small compared to the effect of individual & household characteristics.

21. Selective mobility into neighbourhoods • The negative effect of living in a deprived neighbourhood on occupational mobility might indicate that: • Living in a deprived neighbourhood has a negative effect on occupational mobility • Unmeasured individual characteristics correlate with both the low occupational mobility and the probability of living in a deprived neighbourhood. • So to test robustness of our models we ran separate models for different age, educational, mover status, and tenure groups(owners, private renters and social renters). (Oreopoulos, 2003; Bolster et al 2005; van Ham & Manley, 2010)

23. Social Housing

24. Private Renters

25. Owner Occupiers

26. Selective mobility of owners into deprived neighbourhoods • The tenure split models only show neighbourhood effects for owners and not for renters. • Does this mean that neighbourhood correlations (effects?) only exist for owners? • NO… it is more likely that those owners most at risk of lower occ’ mob’ in 1991 selected themselves into more deprived neighbourhoods. • Such a selection mechanism did not operate for social renters as most were allocated a dwelling (and neighbourhood) in 1991

27. Testing Selection • If there isn’t a selection effect then it should not be possible to predict how individuals ‘sorting’ into neighbourhoods • Research question: Does the neighbourhood an individual enters depend on their ISEI score? • If there is a difference, then there is evidence of sorting…

28. Neighbourhood Deprivation and ISEI

29. Implications • There is little evidence of an independent effect of neighbourhood characteristics on occupational mobility outcomes (?) • Poor people live in poor neighbourhoods because living in affluent ones costs too much… but living in a poor neighbourhood does NOT make poor people significantly poorer. • This does not take away the problem of concentrated poverty in deprived neighbourhoods.

30. Acknowledgements We gratefully acknowledge the support of the SLS team at the LSCS and in particular the support of Dr Zhiqiang Feng The SLS and the LSCS are funded by the: - Scottish Government - Scottish Funding Council (SFC) - Chief Scientist Office (CSO) - General Register Office for Scotland (GROS) - Economic and Social Research Council (ESRC)