Do neighbourhoods influence the likelihood ofreceiving social assistance benefits? Evidence from the Netherlands

Abstract

This paper examines how living in a neighbourhood with a high share of social assistance recipients relates to an individual’s likelihood of receiving social assistance benefits. It uses administrative data for the entire working-age population in the Netherlands from 1999 to 2019. The results show that living in neighbourhoods with twice the share of social assistance benefit recipients is linked to a 2.6 percentage points higher probability of receipt. After adjusting for individual characteristics and spatial sorting, this gap falls to 1.3 percentage points - equivalent to a 14% increase over the 9% average rate. The association is stronger in cities, especially in the largest labour market regions. Older people, migrants, single parents, single-person households, renters and women are more exposed to neighbourhood influences.