Scandinavian Working Papers in Economics

Discussion Paper Series in Economics,
Norwegian School of Economics, Department of Economics

No 6/2026: Neighborhoods, Family and Intergenerational Mobility

Goya Razavi (), Sadegh Eshaghnia () and Raul Leon ()
Additional contact information
Goya Razavi: Dept. of Economics, Norwegian School of Economics and Business Administration, Postal: NHH, Department of Economics, Helleveien 30, N-5045 Bergen, Norway
Sadegh Eshaghnia: Dept. of Economics, University of Chicago, Postal: University of Chicago, Department of Economics, Chicago, IL 60637, The United States of America
Raul Leon: Dept. of Economics, Brown University, Postal: Brown University, Department of Economics, Robinson Hall, 64 Waterman Street, Providence, RI 02912, The United States of America

Abstract: To what extent do childhood neighborhoods shape long-run socio-economic outcomes, and through which mechanisms? Using the quasi-random assignment of refugee children across neighborhoods in Denmark, we show that exposure to higher-quality neighborhoods—as measured by average neighborhood income and the wage outcomes of permanent resident children—raises labor force participation and market income in adulthood. Beyond economic integration, better neighborhoods further promote social integration by increasing educational attainment and naturalization. Applying a causal mediation analysis, we reject full mediation via neighborhood and school characteristics but not via parental income, pointing to the family as a fundamental mediator of neighborhood effects.

Keywords: neighborhood effects; intergenerational mobility; migrant integration; causal mediation; parental investments

JEL-codes: I24; I38; J15; J61; R23

Language: English

49 pages, May 5, 2026

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