SOEPpapers on Multidisciplinary Panel Data Research 409
Using a unique dataset for Germany that links individual longitudinal data from the SOEP to regional data from the federal employment agency and data of real estate prices, we evaluate the impact of neighborhood unemployment on individual employment propects. The panel setup and richness of the data allows us to overcome some of the identification problems which are present in this strand of literature. The empirical results indicate that there is a significant negative impact of neighborhood unemployment on the individual employment probability.
Social interactions unemployment neighborhood characteristics