Neighborhood Change and Local Economic Activity

Hector Blanco and Lorenzo Neri

No 12891, CESifo Working Paper Series from CESifo

Abstract: We study how neighborhood change shapes local business demographics and employment. We use the regeneration of London public housing into mixed-income housing as a natural experiment that led to a large influx of more affluent households. In a difference-in-differences design comparing nearby businesses to those located farther away, we find that regenerations shift business composition – in both counts and employment – away from small local shops and toward larger general retail establishments and dining services that cater to the new residents. While we find no effect on total local employment on average, employment does increase in the areas most disadvantaged at baseline, suggesting that neighborhood change can expand local employment opportunities in these areas.

Keywords: mixed-income housing; gentrification; businesses; employment (search for similar items in EconPapers)
JEL-codes: E24 I38 R12 R38 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_12891

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