Residential Segregation and Public Housing
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Residential Segregation and Public Housing PhD dissertation Ahmad Hassani < Aarhus BSS, Aarhus University Department of Economics and Business Economics 2019 This version: June 9, 2019 © Ahmad Hassani i PREFACE This dissertation represents the tangible results of my PhD studies at the Department of Economics and Business Economics at Aarhus University, from February 2016 to March 2019. I am grateful to the department and to TrygFonden’s Centre for Child Research for the excellent research environment provided, and for the generous financial support that allowed me to participate in courses, summer schools, workshops and conferences in Denmark and abroad. I would like to take the opportunity to thank a number of people for contributing to this dissertation. Special thanks go to my supervisor, Professor Anna Piil Damm, who has guided me personally and academically. It has been a privilege to have such an inspiring and supportive supervisor. She has inspired me immensely with her comprehensive vision of problems and broad experience with economic research. Hence, writing the first two chapters of this dissertation jointly with her and receiving her feedbacks and thoughtful comments on my sole authored paper was a unique learning opportunity. Anna, I am thankful for trusting and taking me as your PhD student. I also thank you for the patience you have shown me and for the way you always took time out for me whenever I have needed it. I also owe you deep appreciation for all of your supports during my academic career. Without your help, I would not have been where I am today. I am grateful to my co-supervisor, Associate Professor Rune Majlund Vejlin, for his useful advices and comments, which have strengthened the chapters of my dissertation. My co-author on the first and second chapters, Marie Louise Schultz-Nielsen, also deserve special thanks. I am happy to work with you Marie, and sincerely appreciate your exceptionally good collaboration and all of your contributions to the first two chapters of my dissertation, as well as our ongoing joint projects. Special thanks are also extended to Professor Michael Rosholm, who trusted and invited me to a short visit of Aarhus University in May 2015. Without your help, I could not start my PhD here. Thank you Michael. I am also thankful to Associate Professor Henning Bunzel for his exceptional knowledge of the Danish register-based data, who always keeps his door open for my questions. I have been blessed with many great colleagues and a friendly work environment during my time as a PhD student at Aarhus University. Among others, I thank Nabanita Datta Gupta, Helena Skyt Nielsen, Lars Skipper, Niels Skipper, Astrid Würtz Rasmussen, Juan Carlos Parra-Alvarez, Bastien ii Michel, Elena Mattana, Anne Brink Nandrup, Alexander Paul, and Timo Hener. Importantly, I am thankful for all my fellow PhD students. Specially, Peter Thingholm for facilitating my integration to university, my great officemate Mette Thorsager who brings delicious cakes during the events, Ata Jalili Marand, Jonas Bødker, Eva Johansen, Maria Gregersen, Jonas Fluchtmann, Alexander Fischer, Carsten Andersen, Andrea Paramo Florencio, Simone Bonin, Mads Hejlesen, Mikkel Nielsen, and all of the colleagues in Labour and Public Policy section. I am grateful to all of you for providing fantastic academic and social environment. I also thank Mette Vad Andersen, Susanne Christensen, Betina Sørensen, and Christel Mortensen for all of their supports. I indebted a lot to my parents, who always tirelessly support me through difficulties, give me unconditional love, and encourage me to achieve my goals in life. Your home gives me a confidence to go forward, because I believe there is a place that I can return in case my attempts fail. The last but not least, my lovely wife, Aida. You deserve very special thanks for obvious reasons. You have been with me in Iran, New Zealand, and Denmark, put up with my ups and downs through these years, and continued to cheer me up whenever needed. Among others, I never forget the weekends and vacations that you stayed at home alone, while I was working on my dissertation. I love you. This dissertation is dedicated to my dearests: Aida, Biuk, and Mehrangiz. Ahmad Hassani Aarhus, June 2019 iii UPDATED PREFACE The pre-defense was held on April 24, 2019. The assessment committee consists of Professor Jos van Ommeren from Free University Amsterdam, Associate Professor Ismir Mulalic from Technical University of Denmark, and Professor Peter Jensen (chair) from Aarhus University. I am grateful for the careful reading of my dissertation and the valuable comments that the committee has provided. Some of their suggestions for improvements have already been implemented, while others are left for future research. Ahmad Hassani Aarhus, June 2019 Contents Summary vii Danish Summary xi Chapter 1 Construction of Danish Residential Neighbourhoods for 1986-2016 1 1 Introduction …………………………………………………………………………… 4 2 Description of old Danish residential neighbourhoods for 1985-2004 ………………. 6 3 Construction of neighbourhoods ……………………………………………………... 7 4 Relevance of neighbourhoods for measurement of segregation and measurement …... 35 of the effects of the interventions into socially deprived neighbourhoods 5 Conclusions …………………………………………………………………………… 41 References …………………………………………………………………………………. 42 Appendix figures ………………………………………………………………………….. 43 Appendix tables …………………………………………………………………………… 45 Chapter 2 Residential Segregation in Denmark during 1986-2016 49 1 Introduction …………………………………………………………………………… 52 2 Literature review ……………………………………………………………………... 58 3 Measurement of residential segregation: Methodological considerations ……………. 65 4 Data …………………………………………………………………………………… 68 5 Residential segregation by socioeconomic status and ethnicity ……………….……... 69 6 Local public housing provision and residential segregation …………………………. 95 7 Conclusions …………………………………………………………………………… 109 References …………………………………………………………………………………. 112 Appendix figures ………………………………………………………………………….. 118 Appendix table …………………………………………………………………………… 129 Chapter 3 Does Growing Up in Public Housing Affect Schooling? 131 1 Introduction …………………………………………………………………………… 134 2 Institutional setting …………………………………………………………………… 137 3 Theoretical background and literature review ……………………………………….. 143 4 Data, Sample selection, and Descriptive statistics ……………………………………. 146 5 Empirical strategy …………………………………………………………………… 153 6 Results ………………………………………………………………………………... 159 7 Conclusion …………………………………………………………………………… 177 References …………………………………………………………………………………. 179 Appendix for construction of estimation samples ………………………………………… 181 Appendix figures ………………………………………………………………………….. 184 Appendix tables …………………………………………………………………………… 192 vii SUMMARY Residential segregation and neighbourhood effects are important, interesting, and topical issues both politically and theoretically, because our children and we live in neighbourhoods. Politically, residential segregation of income and ethnic groups can influence social cohesion. Social cohesion, in turn, is important for unifying different groups of a society and motivating them to trust and support each other. In this regard, factors like residential settlement patterns and influx of immigrants to a country can be a threat to social cohesion. Therefore, without attempts to make ties between natives and newcomers, social cohesion in highly developed welfare states like the Nordic countries might vanish. For this reason we can hear terms like “Parallel society”, “counter culture”, “mixed neighbourhoods”, and “meet each other on the cross” among the New Year’s Eve speech of the current Prime Minster of Denmark, Lars Løkke Rasmussen, in 2018. Nevertheless, this was not the first time that Danes hear terms like these. For instance, the government issued a report with the title “The Government’s strategy against ghetto”1 in May 2004. Additionally, according to the Public Housing Act, the Ministry of Transport, Building, and Housing has published annual lists of ‘ghettos’ (their term for socially deprived neighbourhoods) since 2010. In the latest “ghetto package”2 proposed by the Danish Government in the spring 2018, DKK 12 billion (about USD 1.8 billion) will be allocated for improving the socioeconomic mix in the socially deprived areas through demolition of public housing units and construction of owner-occupied properties during the 2019- 2026 period (Regeringen, 2018). Theoretically, residential segregation of income and ethnic groups may create neighbourhood effects that exist if the initial action (good or bad) of one person in the neighbourhood affects the behaviour of neighbours, through endogenous (social multiplier) peer effects (Manski, 2003). Due to the methodological challenges in identification of peer influence on individual outcomes caused by “The Reflection Problem” (perfect correlation between the average behaviour of neighbours and the average background characteristics of neighbours) and location sorting (Manski, 1993; Tiebout, 1956), few empirical studies provide rigorous evidence on neighbourhood effects (Angrist, 2014). 1 Regeringens strategi mod ghettoisering. 2 Ghettopakke viii While experimental studies and studies exploit natural variation in neighbourhood of residence to address sorting problems find no treatment effects on adult economic outcomes, they find that neighbourhood of residence affect youths’ outcomes. For example, Chetty, Hendren and Katz (2016) investigate the effect of the US Moving