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Immigrant Networks and Their Implications for Occupational Choice and Wages

Author

Listed:
  • Krishna Patel

    (Federal Deposit Insurance Corporation)

  • Francis Vella

    (Georgetown University)

Abstract

Occupational shares of various ethnic groups have grew tremendously in regional U.S. labor markets from 1980 to 2000. Using U.S. Census data, we examine the extent to which this growth is attributed to network effects by studying the relationship between the occupational choice of recently arrived immigrants with those of established immigrants from the same country, We find strong evidence of network effects. First, new arrivals are choosing the same occupations as their compatriots, a decision that is operating at the regional level. Second, individuals who choose the most common occupation of their compatriots enjoy a large and positive earnings effect. © 2013 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Suggested Citation

  • Krishna Patel & Francis Vella, 2013. "Immigrant Networks and Their Implications for Occupational Choice and Wages," The Review of Economics and Statistics, MIT Press, vol. 95(4), pages 1249-1277, October.
  • Handle: RePEc:tpr:restat:v:95:y:2013:i:4:p:1249-1277
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    References listed on IDEAS

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    1. Patrick Bayer & Stephen L. Ross & Giorgio Topa, 2008. "Place of Work and Place of Residence: Informal Hiring Networks and Labor Market Outcomes," Journal of Political Economy, University of Chicago Press, vol. 116(6), pages 1150-1196, December.
    2. George J. Borjas, 2001. "Does Immigration Grease the Wheels of the Labor Market?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 32(1), pages 69-134.
    3. Blau, David M & Robins, Philip K, 1990. "Job Search Outcomes for the Employed and Unemployed," Journal of Political Economy, University of Chicago Press, vol. 98(3), pages 637-655, June.
    4. Borjas, George J., 1999. "The economic analysis of immigration," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 28, pages 1697-1760 Elsevier.
    5. Samuel Bentolila & Claudio Michelacci & Javier Suarez, 2010. "Social Contacts and Occupational Choice," Economica, London School of Economics and Political Science, vol. 77(305), pages 20-45, January.
    6. Giorgio Topa, 2001. "Social Interactions, Local Spillovers and Unemployment," Review of Economic Studies, Oxford University Press, vol. 68(2), pages 261-295.
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    More about this item

    Keywords

    network effects; immigrants; occupational choice; earnings;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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