Ethnic enclaves and the economic success of immigrants - evidence from a natural experiment

Recent immigrants tend to locate in ethnic "enclaves" within metropolitan areas. The economic consequence of living in such enclaves is still an unresolved issue. We use an immigrant policy initiative in Sweden, when government authorities distributed refugee immigrants across locales in a way that may be considered exogenous. This policy initiative provides a unique natural experiment, which allows us to estimate the causal effect on labor market outcomes of living in enclaves. We find substantive evidence of sorting across locations. When sorting is taken into account, living in enclaves improves labor market outcomes; for instance, the earnings gain associated with a standard deviation increase in ethnic concentration is in the order of four to five percent.Immigration; Enclaves; Labor market outcomes

Legal Status at Entry, Economic Performance, and Self-Employment Proclivity: A Bi-National Study of Immigrants

There are concerns about the attachment of immigrants to the labor force, and the potential policy responses. This paper uses a bi-national survey on immigrant performance to investigate the sorting of individuals into full-time paid-employment and entrepreneurship and their economic success. Particular attention is paid to the role of legal status at entry in the host country (worker, refugee, and family reunification), ethnic networks, enclaves and other differences among ethnicities for their integration in the labor market. Since the focus is on the understanding of the self-employment decision, a two-stage structural probit model is employed that determines the willingness to work full-time (against part-time employment and not working), and the choice between full-time paid work and self-employment. The choices are determined by the reservation wage for full-time work, and the perceived earnings from working in paid-employment and as entrepreneur, among other factors. Accounting for sample selectivity, the paper provides regressions explaining reservation wages, and actual earnings for paid-employment and self-employment, which provide the basis for such an analysis. The structural probit models suggest that the expected earnings differentials from working and reservation wages and for self-employment and paid-employment earnings matter much, although only among a number of other determinants. For Germany, legal status at entry is important; former refugees and those migrants who arrive through family reunification are less likely to work full-time; refugees are also less self-employed. Those who came through the employment channel are more likely to be in full-time paid work. In Denmark, however, the status at entry variables do not play any significant role. This suggests that the Danish immigrant selection system is ineffective.Self-employment, Entrepreneurship, Ethnicity, Migration, Asylum seekers, Refugees, Migrant workers, Family reunification, Citizenship, Discrimination

Ethnic Enclaves and Immigrant Earnings Growth

The impact of living in an ethnic enclave on earnings growth of immigrants in Canada is examined using the 1981–2001 Censuses. Consistent with U.S. findings, enclaves are found to have a negative impact on the earnings growth of male immigrants. A negative impact is also found for female immigrants. Living in an enclave was found to be particularly harmful for individuals immigrating as adults, especially for females, but did not affect immigrants who arrived at a young age. Enclaves had a more negative impact on high-skilled male immigrants, especially if they had received the bulk of their education outside of Canada. Enclaves also hindered language skills.enclaves, immigrants, neighbourhoods, earnings

Does Residence in an Ethnic Community Help Immigrants in a Recession?

Research on how the residential segregation of immigrant populations has impacted their labor market outcomes presents many challenges because of the fact that immigrants often choose to locate near co-ethnics to share resources and cultural amenities. Because not all immigrants choose to live in these ethnic communities, identification of a causal effect on living in an ethnic community is problematic. The estimation of the effect of living in these ethnic communities is also difficult because it is ambiguous whether such residence will help or harm the labor market outcomes of immigrants. This study implements a number of approaches to help identify a causal effect, including using sample of adults whose residential location is plausibly exogenous with respect to their labor market outcomes and using the current recession as a source of exogenous variation. Results suggest that residence in an ethnic community after the recession increases the likelihood of working, albeit with longer commutes

Are encalves amenities? An empricial investigation in the Southwest United States.

The role of linguistic enclaves in wage determination is investigated for immigrants and non-immigrants. It is hypothesized that enclaves could affect wages positively as an aid to immigrant adjustment, or negatively as an amenity that minority language speakers are willing to pay for, or both. The results suggest that enclaves in the Southwest U.S. primarily operate as an aid to immigrant adjustment.

Ethnic Enclaves and Social Cohesion

Ethnic enclaves have a vibrant local commercial and services infrastructure. They are not altogether places of poverty and despair, at least not in the Toronto Census Metropolitan Area (CMA). Their social benefits outweigh the disadvantages of the predominance of one ethnic group. Social cohesion is largely promoted through the equality of economic opportunities, open society and public education. These are supra–neighbourhood processes, and institutionalizing them through the metropolitan, provincial and societal policies are ways to promote social cohesion. Neighbourhoods play an insignificant role in these processes