Linea Hasager

"Sick of your poor neighborhood? Quasi-experimental evidence on neighborhood effects in health"

Abstract

Does living in a low-income neighborhood have negative health consequences? We document neighborhood effects in health by exploiting a Spatial Dispersal Policy that resettled refugees quasi randomly across neighborhoods from 1986 to 1998, which allows us to separate causal impacts from selection into neighborhoods. We show that the risk of developing a lifestyle related disease before 2018 increases by 5.4 percent relative to the sample mean for individuals who were allocated to the poorest third of neighborhoods compared to allocation to the richest third of neighborhoods. In particular, among women and younger individuals the impact of neighborhood income on health is larger. Differences across neighborhoods in access to health care, presence of ethnic networks, and individual labor market outcomes – and thus also individual income growth differences – cannot explain our findings. Instead, our results suggest that interaction with immediate neighbors and the characteristics of the very local environment are important for understanding neighborhood effects in health, especially when considering the development of diabetes and obesity.

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