Despite the presence of overall economic growth, during the last decades many developed countries have witnessed a rise in income inequality within their societies. The widening divide makes it crucial to understand why certain groups fall behind. The objective of the proposed project is to explore an avenue that has been largely overlooked by the literature so far: the role of local governmental policies in shaping labour market outcomes of vulnerable groups in society. To causally identify the importance of local governance, I exploit quasi-random variation induced by the Dutch institutional context and a uniquely rich administrative database covering the Dutch population. The project focuses on two socially-at-risk groups who are disadvantaged in the labour market. In the first subproject I look at refugees who are granted asylum in the Netherlands, I make use of their (quasi-) random placement across municipalities. The second subproject explores the outcomes for Dutch parents who have a child with a disability and utilizes a decentralisation reform of youth care responsibilities. The variation in local governance in both natural experiments can show whether and for whom the support policies are effective. In that sense, where you live matters as it may impact individuals’ life outcomes.
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