Neighbourhood Effects and the Welfare State. Towards a European Research Agenda?

Andersson, Roger Article Neighbourhood Effects and the Welfare State. Towards a European Research Agenda? Schmollers Jahrbuch – Journal of Applied Social Science Studies. Zeitschrift für Wirtschaftsund Sozialwissenschaften Provided in Cooperation with: Duncker & Humblot, Berlin Suggested Citation: Andersson, Roger (2008) : Neighbourhood Effects and the Welfare State. Towards a European Research Agenda?, Schmollers Jahrbuch – Journal of Applied Social Science Studies. Zeitschrift für Wirtschaftsund Sozialwissenschaften, ISSN 1865-5742, Duncker & Humblot, Berlin, Vol. 128, Iss. 1, pp. 49-63, https://doi.org/10.3790/schm.128.1.49 This Version is available at: https://hdl.handle.net/10419/292217 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by/4.0/ Neighbourhood Effects and the Welfare State. Towards a European Research Agenda? By Roger Andersson Abstract This paper raises four broad questions related to the neighbourhood effect issue. (1) Is there really a strong relation between housing mix and social mix? (2) How does the social composition of neighbourhoods affect residents’ social interaction and behaviour? (3) Are social opportunities of individual residents related to their neighbourhood context? (4) If there is such a relation, to what extent is this produced through local social interaction? While the answer to the first question is often taken for granted, not only by planners but also by urban research, the following three have been much discussed over the last decade on both sides of the Atlantic. Most researchers hypothesise that neighbourhood effects would be less pronounced in countries like Sweden, where planning practices, social class differences, segregation patterns, and welfare state regulations substantially differ from those found in the U.S. However, recent empirical studies – based on large longitudinal datasets – confirm the existence of neighbourhood effects also in Sweden. Future European research should not only further explore the above four questions but needs also to systematically engage with issues concerning how neighbourhoods should be defined (scale issues), the importance of time of residency in particular neighbourhoods, and how mix should be operationalised (class, ethnicity etc). JEL Classifications: D62, I39, J68 1. Introduction Over the past couple of decades, studies on the impact of neighbourhood compositions on the life chances of individuals are gaining interest and also provide new insights (for an updated overview, see Galster, 2007 and an issue of Housing Studies, 2007, no 5). Most of the empirical research and theoretical inputs so far come from the Unites States, a country that have had a much longer history of racial segregation compared to European countries, but in the wake of increasing immigration to Europe, and fear of social exclusion, issues related to residential segregation have moved high up the urban policy debates in many European countries. The neighbourhood effect issue is one such topic. Schmollers Jahrbuch 128 (2008), 49 –63 Duncker & Humblot, Berlin Schmollers Jahrbuch 128 (2008) 1 OPEN ACCESS | Licensed under | https://creativecommons.org/about/cclicenses/ DOI https://doi.org/10.3790/schm.128.1.49 | Generated on 2023-01-16 13:35:23 50 Roger Andersson This paper takes its point of departure in one particular country, Sweden, a country that has pursued a social mix policy since the mid 1970s as an instrument to avoid further segregation. (Andersson, 2007) One may doubt the efficiency and criticise the lack of strong commitment by planners and local politicians in relation to this general aim but the country is an interesting case for researching some of the underlying assumptions about neighbourhood compositions and social outcomes. It is interesting from a policy perspective but also due to the existence of internationally unique types of data, which enable researchers to conduct large scale longitudinal studies on individuals (in fact the entire population). Empirically, this paper will make use of results from a series of published and yet unpublished papers using the Swedish data resources. 1 The paper will address four broad questions indicated in figure 1. 1. Is there really a strong relation between housing mix and social mix? This is a fundamental issue since planning for social mix is based on the assumption that the micro structures of the housing stock in terms of tenure, housing types, size and cost of dwellings etc are thought to strongly influence the population composition of neighbourhoods. 2. How does population composition of neighbourhoods affect residents’ social interaction and behaviour? 3. Are social opportunities of individual residents related to their neighbourhood context? 4. If there is such a relation, to what extent is this produced through local social interaction? The idea is that social opportunities might be directly or indirectly affected by residency. Three equally important questions arise if one wants to study these relations: What population mix matters? What scale matters? What time matters? I will deal with these latter questions after having discussed figure 1 more in detail. 2. Housing Mix and Social Mix Combining basic individual rights – such as the right for people to make a choice where to live in a city – with aims such as striving for population mix in neighbourhoods is easier said than done. The idea behind mix is to create positive social externalities (a collective assett) but the tools cannot be allowed to conflict with the right for people to decide where to live. Hence, no legal opportunities exist that allow politicians to create social mixes directly (see Schmollers Jahrbuch 128 (2008) 1 1Andersson (2001); Andersson/ Bråmå (2004); Andersson / Musterd (2005, 2006); Musterd / Andersson (2005, 2006); Andersson / Musterd / Galster / Kauppinen (2007); Musterd / Andersson / Galster / Kauppinen (2007); Galster / Kauppinen / Musterd / Andersson (fc). OPEN ACCESS | Licensed under | https://creativecommons.org/about/cclicenses/ DOI https://doi.org/10.3790/schm.128.1.49 | Generated on 2023-01-16 13:35:23 Neighbourhood Effects and the Welfare State 51 Borevi, 2002, chapter 6, who analyses Swedish housing mix policies since 1975). Therefore, politicians tend to use housing and planning policy tools (i.e. supply measures) instead to reach their goals. In short, the idea is that housing mix (a mix of housing types and tenure types) will create social mix (a mix of households according to their socio-economic position) and that this will create better social opportunities for individuals. In fact, these strategies are based on two crucial assumptions. The first is that social mix really enhances the individual opportunities (i.e. relations 3 and / or 4 in figure 1 are true). The second is that there is a strong relation between social mix and housing mix (relation 1 is true). Source: Author. Figure 1: A research programme on neighbourhood mix and neighbourhood effects These issues are obviously firmly related to the actual plans and activities around the restructuring of certain areas in cities. Today, at least in many European cities, a large share of urban restructuring plans is aimed at transforming large-scale post-war housing estates (van Kempen et al., 2006). The areas in which these estates can be found tend to be rather homogeneous in terms of the type and tenure of the dwellings. They are also often attracting households with a rather weak social position and many immigrants. The dominant idea is that there is housing (type and tenure) homogeneity that creates social homogeneity (concentration of poor people) that reduces social opportunities for Schmollers Jahrbuch 128 (2008) 1 The Micro Structure of the Housing Stock (neighbourhoods’ composition in terms of tenure and housing types) Social and Ethnic composition of neighbourhoods Social interaction Effects on attitudes and behaviour Social opportunities (1) (2) (3) (4) OPEN ACCESS | Licensed under | https://creativecommons.org/about/cclicenses/ DOI https://doi.org/10.3790/schm.128.1.49 | Generated on 2023-01-16 13:35:23 52 Roger Andersson those who are living there. So, the same set of assumptions applies for these estates and the people living in them. It is worth noting that homogenous highincome areas are never considered to constitute problems for individuals or policy makers. As Andersson (2000) shows in a countrywide analysis on housing segregation in Sweden, the geographical concentration of the rich is much stronger than that of the poor. And in Sweden, as probably elsewhere, the majority of all homogenous areas are dominated by home ownership. In the Stockholm region 288,000 people live in neighbourhoods having more than 90% of the population in home ownership. As a contrast, only 52,000 live in neighbourhoods having a similarly strong dominance of rental dwellings. If more mix as such is wanted, mixing the former seems to be an appropriate recommendation. From the literature we know that assumptions regarding the relation between housing mix, social mix and social opportunities are insufficiently tested. There will be post-war estates with a homogeneous population where individuals appear to be socially blocked; where social problems and sometimes criminality characterize the daily lives of their inhabitants and where, from time-to-time social tensions get too high, occasionally even resulting in urban riots. These estates are well known locally and often also highly stigmatized. Yet, this does not automatically imply that all post-war housing estates are associated with these problems; neither does it mean that all socially homogeneous (and poor) estates or areas are associated with problems (Musterd / Andersson, 2005) Musterd and Andersson (2005) find that relation (1) (see figure 1) is rather weak in Sweden as a whole. Further study is needed, not least studies that analyse the relation more in detail for cities of different size. One may hypothesize that although the relation is quite weak at the national level it is probably much stronger in the larger cities (as indicated by the Stockholm example above). 3. Social and Ethnic Mix and Neighbourhood Effects Many researchers make use of Charles Manski’s (2000) distinction between three types of neighbourhood effects: endogenous, contextual (exogenous) and correlated (see Galster, 2006). If we face endogenous interactions, the propensity of an agent to behave in some way varies with the behaviour of the group. In contextual interactions, the propensity of an agent to behave in some way varies with exogenous characteristics of the group members. Correlated effects concern situations when agents in the same group tend to behave similarly because they have similar individual characteristics or face similar institutional environments. As concluded by Manski: “Endogenous and contextual interactions express distinct ways that agents might be influenced by their soSchmollers Jahrbuch 128 (2008) 1 OPEN ACCESS | Licensed under | https://creativecommons.org/about/cclicenses/ DOI https://doi.org/10.3790/schm.128.1.49 | Generated on 2023-01-16 13:35:23 Neighbourhood Effects and the Welfare State 53 cial environments, while correlated effects express a non-social phenomenon.” (Manski, 2000, 127). Many versions of endogenous effects have been forwarded, including effects related to socialization, social networks, local competition over finite resources, and relative deprivation. Exogenous neighbourhood effects occur if the behaviours or attitudes of one neighbour depend on the exogenous (or predetermined, fixed) characteristics of the individual’s neighbours, such as ethnicity, religion, or race. For my purpose the distinction between endogenous and exogenous effects are not of immediate importance. Both sets of effects relate to the population composition of a neighbourhood and both relate to the fact that people interact locally and potentially have influence on each other (relation 2 and 4 in figure 1). Manski’s third type of possible effects, the correlated neighbourhood effect, is however interesting as it does not presuppose ideas about “contagion effects” or mechanisms related directly to the composition of households. Correlated neighbourhood effects typically do not vary by alterations in neighbourhood household composition, but rather are determined by larger structural forces in the metropolitan area, like locations of jobs and geographic dis-amenities and the structures of local government. These external forces may impinge differentially on different neighbourhoods, but within any given neighbourhood they affect all residents roughly equally, producing thereby correlations in neighbours’ outcomes (Galster, 2006; Andersson et al., 2007). Such aspects of peoples’ environment are not ‘non-social’ – and certainly not non-political – but they do not stem from local human to human interaction. Of course, the real effect of the external forces on individuals is depending on individual resources and dispositions. 4. What Mix Matters? In a Swedish-Dutch collaboration, Roger Andersson and Sako Musterd have produced a series of papers using the statistical database GeoSweden as the empirical foundation. GeoSweden contains yearly demographic, socioeconomic, educational and geographical information on all people residing in Sweden 1990 – 2004 (later to be updated with information for 2005 and 2006). The first two papers (Musterd/ Andersson, 2005 and 2006 respectively) are based on the 1991 to 1999 period, and both attempts to analyse the existence and magnitude of neighbourhood effects on (un)employment careers. Both these papers confirm the existence of such effects. Figure 2 gives an overview of the relation between the percentage of unemployed in the 500m by 500m neighbourhoods (entire country) and the percentage of all unemployed in 1991 who remain unemployed also in 1995 and 1999. The levels are different according to national origin and educational groups but all categories experience a clear impact of the residential context (horizontal axis). The effects seem to be rather linear as unemployment increases from 2 to about 15 percent. Schmollers Jahrbuch 128 (2008) 1 OPEN ACCESS | Licensed under | https://creativecommons.org/about/cclicenses/ DOI https://doi.org/10.3790/schm.128.1.49 | Generated on 2023-01-16 13:35:23 54 Roger Andersson In an enlarged collaboration, including also George Galster and Timo Kauppinen, Swedish data are used for examining several important issues in the neighbourhood effects discourse. In Andersson / Musterd / Galster / Kauppinen (2007) the authors address the crucial question “What mix matters”? This paper explores the degree to which a wide variety of 1995 neighbourhood conditions in Sweden are statistically related to earnings for all adult metropolitan and non-metropolitan men and women during the 1996– 1999 period, controlling for a wide variety of personal characteristics. They find that the extremes of the neighbourhood income distribution, operationalised by the percentages of adult males with earnings in the lowest 30 th and the highest 30 th percentiles, hold greater explanatory power than domains of household mix related to education, ethnicity, or housing tenure. Separating the effects of having substantial shares of low and high income neighbours, they find that it is the presence of the former that means most for metropolitan and non-metropolitan men and women, with the largest effects for metropolitan men. According to research findings in a recently finished EU-funded project, Urban Governance, Inclusion and Sustainability (UGIS), both area-based policies and most mix policies are now partly driven by the fear of ethnic clustering (Andersson, 2003; Beaumont et al., 2003; Palander, 2006). Our findings do not support the hypothesis that the ethnic dimension is the most crucial one in relation to employment and income prospects. On the contrary, we find that the socioeconomic composition of neighbourhoods is the most important dimension, at least in terms of individuals’ incomes. It is however important to note that although these results clearly point at the conclusion that mix of income groups is the most important aspect, this is not necessarily true for other types of social outcomes (educational achievements, crime, social cohesion etc.). A special aspect of the ‘what mix matters’ issue relates to local concentration of immigrants. A Musterd / Andersson / Galster / Kauppinen (fc) paper addresses the role of ethnic clusters in relation to immigrants’ income development. Differences in immigrant economic trajectories have been attributed to a wide variety of factors. One of these is the local spatial context where immigrants reside. This spatial context assumes special salience in light of expanding public exposure to and scholarly interest in “ethnic enclaves”. Does concentrating immigrants aid or retard their chances for improving their economic standing? In this paper the authors contribute clear statistical evidence relevant to answering this question. They develop multiple measures of the spatial context in which immigrants reside and assess their contribution to average earnings of immigrant individuals in the three large Swedish metropolitan areas, controlling for individual and regional labour market characteristics. They use longitudinal information about Swedish immigrants during the 1995– 2002 period. They find no evidence (with one exception) that own-group ethnic enclaves in Sweden typically enhance the income prospects of its resident immiSchmollers Jahrbuch 128 (2008) 1 OPEN ACCESS | Licensed under | https://creativecommons.org/about/cclicenses/ DOI https://doi.org/10.3790/schm.128.1.49 | Generated on 2023-01-16 13:35:23 Neighbourhood Effects and the Welfare State 55 grants, unless individuals use the enclave for a short-term place from which to launch themselves quickly into different milieus. Source: Musterd/Andersson, 2006. Figure 2: Percentage unemployed staying unemployed in 1995 and 1999, per environment type, per country of birth 5. What Scale Matters? In the wider literature on the relationship between man and environment some argue that the direct neighbourhood of individuals has lost significance, especially for life chances and social opportunities of the adult population. Fischer (1982), for example, stated that people tend to become socially integrated through differentiated, looser networks at different scales. However, Bridge / Forrest / Holland (2004, 39), who summarised the research evidences on neighbouring, state that “The evidence for the widely held perception that neighbourliness is declining is in fact mixed.” The ‘what scale matters’ question is highly relevant to the more general ‘does neighbourhood matter’ question. That is, if the ‘wrong scale’ is used in neighbourhood effect studies, we easily may arrive at wrong conclusions about neighbourhood effects; we may overor underestimate them. Then the question should be asked whether that conclusion holds when other scales are applied. A study carried out by Johnston et al. (2004) is very interesting from this perspective. They focused on scale and neighbourhood effects on voting behaSchmollers Jahrbuch 128 (2008) 1 0 5 10 15 20 25 30 35 40 45 0 0-2 2-4 4-6 6-8 8-10 10-12 12-14 14-16 16-20 20-30 30-40 40-50 perc. unemployed in the environment 1991 percentage remaining unemployed Sweden Western Eastern Europe Non-Western Total OPEN ACCESS | Licensed under | https://creativecommons.org/about/cclicenses/ DOI https://doi.org/10.3790/schm.128.1.49 | Generated on 2023-01-16 13:35:23 56 Roger Andersson viour and applied the British Household Panel Study. They created ‘bespoke’ neighbourhoods, local areas defined for each individual separately; these environments were built up with enumeration district data. Two different types of bespoke neighbourhoods were created: by different numbers of nearest population around the respondent’s home (neighbourhoods with nearest 500 around the individual; neighbourhoods with nearest 1000 around the individual, etc); and by different distances from the respondent’s home (population within 250 m, population within 500m, etc.; see also Musterd / Ostendorf / De Vos, 2003 and Musterd / Andersson, 2006 in which similar types of bespoke neighbourhoods are used). Their arguments to do so were based on the idea that separate mechanisms and processes may operate at different scales. Among other things they found that there were simultaneous wide-area and highly local neighbourhood effects; labour voting was greater in more deprived areas, but especially so in pockets of extreme deprivation. The authors conclude that: “there are many hypotheses regarding neighbourhood effects in geographical and related literatures, but their successful testing has been hampered by the absence of relevant data. In particular, analysts have lacked data on both individuals and their neighbourhood milieus, which allow the interactions of different types of people in different kinds of local context to be explored. Furthermore, most analyses of neighbourhood effects have been significantly constrained by the nature of the areas for which data are available. In many cases these are relatively large and in almost all cases no data are available to explore variations in the nature and strength of the sought-for effects at different scales.” (Johnston et al., 2004, 367). These statements were the drivers behind a recent Andersson/ Musterd (2006) paper in which the question is raised: “to what extent individual social mobility of adults is influenced by individual and neighbourhood characteristics, with a special focus on various levels of scale and various definitions of area compositions.” We assumed that if endogenous neighbourhood effects are in operation, such effects would be greater in the immediate surrounding of an individual and they would decrease as the size of the unit increases. However, for correlated effects it is more difficult to hypothesize which level would be the most important and the spatiality can also be expected to vary according to which outcome we decide to study. In our case, focusing on labour market-related outcomes, both the existence of spatial mismatch (number of jobs available nearby, uneven public transportation services etc) and uneven support provided to people who are unemployed or in need of job information services can be expected to be more influential at the municipal and urban district levels than at the level of the immediate surrounding of individuals. Or put the other way around: at higher levels of geographical scale we expect endogenous effects to be less strong than they are at the scale of peoples’ closest environSchmollers Jahrbuch 128 (2008) 1 OPEN ACCESS | Licensed under | https://creativecommons.org/about/cclicenses/ DOI https://doi.org/10.3790/schm.128.1.49 | Generated on 2023-01-16 13:35:23 Neighbourhood Effects and the Welfare State 63 Özüekren, A. S./Magnusson, L. (1997): Housing conditions of Turks in Sweden, in: A. S. Özüekren / van Kempen R. (eds.), Housing conditions of Turks in European Cities, London. Palander, C. (2006): Områdesbaserad politik för minskad segregation –En studie av den svenska storstadspolitiken, Geografiska regionstudier no 66. Uppsala: Department of Social and Economic Geography, Uppsala university. van Kempen, R. / Murie, A. / Knorr-Siedow, T. / Tosics, I. (eds.) (2006): Regenerating large housing estates in Europe. A guide to better practice, Restate report, Utrecht: Urban and Regional Research centre, Utrecht university. Schmollers Jahrbuch 128 (2008) 1 OPEN ACCESS | Licensed under | https://creativecommons.org/about/cclicenses/ DOI https://doi.org/10.3790/schm.128.1.49 | Generated on 2023-01-16 13:35:23