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

  • Anna Piil Damm

    ()

    (CAM and Department of Economics, Aarhus School of Business)

This study investigates empirically how residence in ethnic enclaves affects labour market outcomes of refugees. Self-selection into ethnic enclaves in terms of unobservable characteristics is taken into account by exploitation of a Danish spatial dispersal policy which randomly disperses new refugees across locations conditional on six individual-specific characteristics. The results show that refugees with unfavourable unobserved characteristics are found to self-select into ethnic enclaves. Furthermore, taking account of negative self-selection, a relative standard deviation increase in ethnic group size on average increases the employment probability of refugees by 4 percentage points and earnings by 21 percent. I argue that in case of heterogenous treatment effects, the estimated effects are local average treatment effects.

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Paper provided by Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London in its series CReAM Discussion Paper Series with number 0607.

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Date of creation: Aug 2006
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Handle: RePEc:crm:wpaper:0607
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