Ethnic Clustering in Schools and Early Career Outcomes

We study how ethnic clustering during compulsory schooling affects postcompulsory educational outcomes among ethnic minority students. We evaluate the impacts of students’ exposure to foreign language speakers and speakers of their own foreign language on their educational tracks, difficulty of vocational education, and projected labour market outcomes. We find that a higher share of foreign language speakers in the cohort increases a student’s probability of entering the vocational (vs. academic) track; this effect is amplified by an increasing share of peers speaking the student’s own foreign language. Furthermore, it leads to less difficult vocational education and lower predicted earnings. The drivers of these peer effects are shown to be related to language acquisition, ambition, and networks.