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Human Capital Traps? Enclave Effects Using Linked Employer-Household Data

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  • Liliana D. Sousa
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    Abstract

    This study uses linked employer-household data to measure the impact of immigrant social networks, as identified via neighborhood and workplace affiliation, on immigrant earnings. Though ethnic enclaves can provide economic opportunities through job creation and job matching, they can also stifle the assimilation process by limiting interactions between enclave members and non-members. I find that higher residential and workplace ethnic clustering among immigrants is consistently correlated with lower earnings. For immigrants with a high school education or less, these correlations are primarily due to negative self-selection. On the other hand, self-selection fails to explain the lower earnings associated with higher ethnic clustering for immigrants with post-secondary schooling. The evidence suggests that co-ethnic clustering has no discernible effect on the earnings of immigrants with lower education, but may be leading to human capital traps for immigrants who have more than a high school education.

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    File URL: ftp://ftp2.census.gov/ces/wp/2013/CES-WP-13-29.pdf
    File Function: First version, 2013
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    Bibliographic Info

    Paper provided by Center for Economic Studies, U.S. Census Bureau in its series Working Papers with number 13-29.

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    Length: 44 pages
    Date of creation: Jun 2013
    Date of revision:
    Handle: RePEc:cen:wpaper:13-29

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    Related research

    Keywords: migration; ethnic enclaves; neighborhood effects; labor market assimilation;

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    1. Patrick J. Bayer & Robert McMillan & Kim Rueben, 2004. "What Drives Racial Segregation? New Evidence Using Census Microdata," Yale School of Management Working Papers ysm409, Yale School of Management.
    2. Abowd, J.M. & Kramarz, F. & Margolis, D.N., 1995. "High-Wage Workers and High-Wage Firms," Cahiers de recherche 9503, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
    3. Patrick Bayer & Stephen L. Ross & Giorgio Topa, 2005. "Place of Work and Place of Residence: Informal Hiring Networks and Labor Market Outcomes," Working Papers 927, Economic Growth Center, Yale University.
    4. Marianne Bertrand & Erzo F.P. Luttmer & Sendhil Mullainathan, 1999. "Network Effects and Welfare Cultures," JCPR Working Papers 62, Northwestern University/University of Chicago Joint Center for Poverty Research.
    5. Cutler, David M. & Glaeser, Edward L. & Vigdor, Jacob L., 2008. "When are ghettos bad? Lessons from immigrant segregation in the United States," Journal of Urban Economics, Elsevier, vol. 63(3), pages 759-774, May.
    6. Hoyt Bleakley & Aimee Chin, 2004. "Language Skills and Earnings: Evidence from Childhood Immigrants," The Review of Economics and Statistics, MIT Press, vol. 86(2), pages 481-496, May.
    7. Borjas, George J, 1985. "Assimilation, Changes in Cohort Quality, and the Earnings of Immigrants," Journal of Labor Economics, University of Chicago Press, vol. 3(4), pages 463-89, October.
    8. Roberto Pedace & Stephanie Rohn, 2008. "A Warm Embrace or the Cold Shoulder: Wage and Employment Outcomes in Ethnic Enclaves," Working Papers 08-09, Center for Economic Studies, U.S. Census Bureau.
    9. John M. Abowd & Bryce E. Stephens & Lars Vilhuber & Fredrik Andersson & Kevin L. McKinney & Marc Roemer & Simon Woodcock, 2002. "The LEHD Infrastructure Files and the Creation of the Quarterly Workforce Indicators," Longitudinal Employer-Household Dynamics Technical Papers 2002-05, Center for Economic Studies, U.S. Census Bureau.
    10. Fredrik Andersson & Monica Garcia-Perez & John Haltiwanger & Kristin McCue & Seth Sanders, 2010. "Workplace Concentration of Immigrants," Working Papers 10-39r, Center for Economic Studies, U.S. Census Bureau, revised Nov 2011.
    11. Joseph Altonji & David Card, 1989. "The Effects of Immigration on the Labor Market Outcome of Less-Skilled Natives," Working Papers 636, Princeton University, Department of Economics, Industrial Relations Section..
    12. Philip Oreopoulos, 2011. "Why Do Skilled Immigrants Struggle in the Labor Market? A Field Experiment with Thirteen Thousand Resumes," American Economic Journal: Economic Policy, American Economic Association, vol. 3(4), pages 148-71, November.
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