In Good Company – Neighborhood Quality and Female Employment

Peggy Bechara (née David), Lea Eilers and Alfredo Paloyo

No 535, Ruhr Economic Papers from RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen

Abstract: Using a uniquely assembled panel dataset, we estimate the impact of neighborhood and peer effects on female labor supply. Nonrandom sorting and unobserved heterogeneity at the individual and neighborhood levels make recovering these impact parameters more complicated in the absence of (quasi-)experimental variation in neighborhood attributes. Our estimation strategy rests on using a hedonic pricing model to control for neighborhood-level unobserved heterogeneity and using a fixed-effects approach to account for the correlation induced by individual time-invariant unobservables. The results suggest that women's participation behavior is significantly associated with peer and neighborhood attributes. The extensive margin is driven by the average female employment rate; the intensive margin is driven by the average share of fulltime employed females in the neighborhood. These relationships are stronger in the subsample of mothers. However, these statistically significant associations do not survive when we control for individual time-invariant unobservable heterogeneity.

Keywords: neighborhood effects; female labor supply; social interactions; peer effects (search for similar items in EconPapers)
JEL-codes: J13 J22 R23 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-soc and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:rwirep:535

DOI: 10.4419/86788612

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