Do Initial Neighborhood Characteristics Impact Future Residential Integration of Refugees? Quasi-experimental Evidence from a Swedish Placement Policy

Abstract Sweden has recorded the highest number of refugees per capita in Europe in recent decades, while its major cities maintain high levels of ethnic segregation. This paper investigates the long-term impact of refugees’ initial neighborhood placement on long-term neighborhood integration. Using full population register data since 1990, the paper applies a fine-grained k-nearest-neighbor approach and accounts for refugee's potential self-selection into neighborhoods by using a Swedish refugee placement policy as exogenous treatment. Our results indicate that the higher the shares of natives, highly educated and employed in the refugees’ initial neighborhood, the higher also the respective shares in their future neighborhood along these dimensions. This locational-attainment result holds robustly and is not driven by stayers. We argue that neighborhood socialization on a small geographic scale can be an important channel in explaining the path-dependent pattern of residential integration. The result encourages the use of placement policies to reduce rigid ethnic segregation patterns.