Identifying the tipping point that makes natives move
Research conducted at NHH shows that there is a critical point at which a neighbourhood develops towards complete segregation.
‘In connection with the refugee crisis in Europe a few years ago, we wanted to understand the mutual relationship between settlement and interaction,’ says Alexander L. P. Willén.
Willén is an associate professor employed in a tenure-track position at the Department of Economics. Together with Anders Böhlmark, he has published the article ‘Tipping and the Effects of Segregation’ in the American Economic Journal: Applied Economics.
‘We analyse how the ethnic population composition in Swedish neighbourhoods affects people's education and labour market outcomes in the short and long term. We look at the differences between those who stay in a neighbourhood that becomes segregated and those who live in a neighbourhood that is not segregated.’
Critical point for immigrant share
‘It’s possible to identify a critical tipping point at which a neighbourhood develops towards complete segregation. We found that, when the proportion of non-Western Europeans reached around 17 to 18 per cent, the native population started moving from the area. This led to a strong discontinuity in the development of the population composition,’ says Willén.
He adds that, in practice, this means that a neighbourhood with an immigrant share of 18 per cent will tip over and become segregated, whereas a neighbourhood with a 17 per cent share will not.
‘Once we had identified this phenomenon in the Swedish settlement pattern, it was interesting to look at whether it changes the performance of those who stay. Whether we can find a reason why people move when the immigrant share reaches this point,’ he says.
In order to measure the effects of a neighbourhood tipping over, Willén and Böhlmark used what is known as a regression discontinuity design. They compared individuals in neighbourhoods where the immigrant share is just above the tipping point with individuals in neighbourhoods where the share is just below the tipping point.
Does not lead to poorer performance
‘We found that increased segregation does not lead to poorer performance at school or in the labour market,’ says Willén.
Ten years later, there is, in principle, no difference in the type of education between those who remain and those who move. There is no difference in how much they earn or in the rate of unemployment.
‘We found no differences in social status or social differences. Nor did we find any differences in the factors we believe to be important in the labour market that indicate that people who live in neighbourhoods with a higher immigrant share fare worse,’ he says.
Can predict areas at risk of segregation
He explains that identifying the neighbourhood tipping point can provide interesting information for policy makers. It makes it easier to predict which areas are at risk of segregation.
‘When a neighbourhood is approaching this threshold, we see that it quickly becomes less popular among the majority population. Over time, these neighbourhoods can develop towards complete segregation,’ says Willén.