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Ethnic Enclaves and the Economic Success of Immigrants—Evidence from a Natural Experiment

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  • Per-Anders Edin
  • Peter Fredriksson
  • Olof Åslund

Abstract

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 data from an immigrant policy initiative in Sweden, when government authorities distributed refugee immigrants across locales in a way that we argue is 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 less skilled immigrants: the earnings gain associated with a standard deviation increase in ethnic concentration is 13 percent. Furthermore, the quality of the enclave seems to matter. Members of high-income ethnic groups gain more from living in an enclave than members of low-income ethnic groups.

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  • Per-Anders Edin & Peter Fredriksson & Olof Åslund, 2003. "Ethnic Enclaves and the Economic Success of Immigrants—Evidence from a Natural Experiment," The Quarterly Journal of Economics, Oxford University Press, vol. 118(1), pages 329-357.
  • Handle: RePEc:oup:qjecon:v:118:y:2003:i:1:p:329-357.
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    More about this item

    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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