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The neighbourhood is not what it used to be : has there been equalisation of opportunity across families and communities in Norway?

Raaum, Oddbjørn; Salvanes, Kjell Gunnar; Sørensen, Erik Ø.
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URI
http://hdl.handle.net/11250/162996
Date
2001-12
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  • Discussion papers (SAM) [578]
Abstract
Parents influence their children's adult outcomes through economic and genetic

endowments, transmission of cultural values and social skills, and through choice

of residential location. Using a variance decomposition framework which provides

bounds on the effect of families and neighbourhoods, we find important effects

of family characteristics as well as residential location on educational attainment

and adult earnings in Norway. Families are more important than neighbourhoods

as the correlations among siblings are significantly higher than among children

growing up in the same local community. Sibling correlations are estimated

to be a little lower than for the US, while correlations between neighbourhood

children in Norway are found to be significantly weaker than in the US. Unlike

previous studies, we also assess changes over time by studying children growing

up around 1960 and 1970. While family effects are permanent over time, the

impact of neighbourhoods is reduced by half in size from 1960 to 1970 and we

link this result to several policy changes in the 1960s aimed at increasing equality

of opportunity in Norway. Our results differ from previous US studies, suggesting

that the role of families and neighbourhoods in explaining the degree of equality

of opportunity and social mobility depends on labour market institutions and redistributive policies.
Publisher
Norwegian School of Economics and Business Administration. Department of Economics
Series
Discussion paper
2001:36

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