Scandinavian Working Papers in Economics

Working Paper Series in Economics and Institutions of Innovation,
Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies

No 386: Distinguishing Neighborhood and Workplace Effects on Individual Productivity: Evidence from Sweden

Charlotta Mellander (), Kevin Stolarick and José Lobo
Additional contact information
Charlotta Mellander: Jönköping International Business School, Martin Prosperity Institute, Rotman School of Management, University of Toronto & Centre of Excellence for Science and Innovation Studies (CESIS)
Kevin Stolarick: Urban Studies, University of Toronto
José Lobo: School of Sustainability, Arizona State University

Abstract: We investigate the effects on individuals’ productivity (captured through their wage income) of two social networks in which individuals are embedded: their residential neighborhood and their workplace. We avail ourselves of Swedish micro-level data which makes it possible to identify individual workers, and who they live next to and work with. We vary the spatial extent of the non-workplace social networkfrom block group to the whole of a metropolitan areato examine which social community most affects an individual’s productivity. We distinguish between individuals engaged in “creative” and “non creative” occupations so as to starkly control for differences in education, training and skills. Our results suggest that residential neighborhoods do matter for individuals’ productivity, although the effect is stronger for noncreatives. For both creatives and noncreatives their workplace group has the greatest effect on income.

Keywords: network effects; neighborhood; productivity; workplace; creative occupations

JEL-codes: J10; R20; R23

30 pages, December 15, 2014

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