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Ethnic Enclaves and Immigrant Labor Market Outcomes: Quasi-Experimental Evidence

  • Anna Piil Damm

I examine the effects of the ethnic enclave size on labor market outcomes of immigrants. I account for ability sorting into enclaves by exploiting a Danish spatial dispersal policy under which refugees were randomly dispersed across locations. First, I find strong evidence that refugees with unfavorable unobserved characteristics self-select into ethnic enclaves. Second, a relative standard deviation increase in the ethnic enclave size increases annual earnings by 18% on average, irrespective of skill level. Third, further findings are consistent with the explanation that ethnic networks disseminate job information, which increases the job-worker match quality and thereby the hourly wage rate. (c) 2009 by The University of Chicago.

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Article provided by University of Chicago Press in its journal Journal of Labor Economics.

Volume (Year): 27 (2009)
Issue (Month): 2 (04)
Pages: 281-314

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Handle: RePEc:ucp:jlabec:v:27:y:2009:i:2:p:281-314
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