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The purpose of this paper is to investigate whether there is unequal treatment in hiring depending on whether a job applicant signals living in a bad (deprived) neighborhood or in a good (affluent) neighborhood.

The authors conducted a field experiment where fictitious job applications were sent to employers with an advertised vacancy. Each job application was randomly assigned a residential address in either a bad or a good neighborhood. The measured outcome is the fraction of invitations for a job interview (the callback rate).

The authors find no evidence of general neighborhood signaling effects. However, job applicants with a foreign background have callback rates that are 42 percent lower if they signal living in a bad neighborhood rather than in a good neighborhood. In addition, the authors find that applicants with commuting times longer than 90 minutes have lower callback rates, and this is unrelated to the neighborhood signaling effect.

Empirical evidence of causal neighborhood effects on labor market outcomes is scant, and causal evidence on the mechanisms involved is even more scant. The paper provides such evidence.