Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/312012 
Year of Publication: 
2024
Series/Report no.: 
IZA Discussion Papers No. 17573
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
Does the labeling of neighborhoods affect their outcomes? Place-based policies targeting disadvantaged areas aim to improve their conditions, but the labels they impose carry consequences of their own. In this paper, we examine Denmark's Ghetto Plan which designated public housing areas with a large share of immigrant population, high crime, and high unemployment as "ghettos", with minimal additional implications. We exploit Danish administrative data, and adopt a Difference-in-Differences approach at the neighborhood and individual level. We find that the policy led to worsening average characteristics at the neighborhood level, largely due to compositional changes driven by Danish new entrants with lower income and education levels. Following individuals affected by the policy, we find significant negative effects on their income with no discernible effects on criminal behavior. We estimate that Danes are willing to accept a 3% drop in income to move out of labeled neighborhoods. In all, the Danish ghetto policy was largely ineffective, and in some aspects, even detrimental.
Subjects: 
residential segregation
place-based policies
migration
neighborhood effects
JEL: 
J15
J18
R23
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.