Distinguishing neighbourhood and workplace network effects on individual income: evidence from Sweden

Distinguishing neighbourhood and workplace network effects on individual income: evidence from Sweden. Regional Studies. This paper investigates the effects on individuals’ income of two social networks in which individuals are embedded: their residential neighbourhood and their workplace. The paper avails itself of Swedish micro-level data, which make it possible to identify individual workers, and with whom they live next to and work. The spatial extent of the non-workplace social network – from block group to the whole of a metropolitan area – is varied to examine which social community most affects an individual’s income. The paper distinguishes between individuals engaged in high- and low-skilled occupations so as to starkly control for differences in education, training and skills. The results suggest that residential neighbourhoods do matter for individuals’ income, although the effect is stronger for low-skilled individuals. For both high- and low-skilled individuals, their workplace group skill has the greatest effect on income, but the effect is negative for high-skilled and positive for low-skilled individuals.