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

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 heterogeneous treatment effects, the estimated effects are local average treatment effects

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File URL: http://www.hha.dk/nat/wper/06-4_apd.pdf
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Paper provided by University of Aarhus, Aarhus School of Business, Department of Economics in its series Working Papers with number 06-4.

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Length: 54 pages
Date of creation: 27 Sep 2006
Date of revision:
Handle: RePEc:hhs:aareco:2006_004
Note: Published as “Ethnic Enclaves and Immigrant Labor Market Outcomes: Quasi-Experimental Evidence”. Journal of Labor Economics 2009, 27(2): 281-314.
Contact details of provider: Postal: The Aarhus School of Business, Prismet, Silkeborgvej 2, DK 8000 Aarhus C, Denmark
Phone: +45 89 486396
Fax: +45 8615 5175
Web page: http://www.asb.dk/departments/nat.aspx

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  18. Chiswick, Barry R. & Miller, Paul W., 2002. "Do Enclaves Matter in Immigrant Adjustment?," IZA Discussion Papers 449, Institute for the Study of Labor (IZA).
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  24. Edin, Per-Anders & Fredriksson, Peter & Åslund, Olof, 2000. "Ethnic Enclaves and the Economic Success of Immigrants - Evidence from a Natural Experiment," Working Paper Series 2000:21, Uppsala University, Department of Economics.
  25. Imbens, Guido W & Angrist, Joshua D, 1994. "Identification and Estimation of Local Average Treatment Effects," Econometrica, Econometric Society, vol. 62(2), pages 467-75, March.
  26. Rosholm, Michael & Scott, Kirk & Husted, Leif, 2001. "The Times They are A-Changin': Organizational Change and Immigrant Employment Opportunities in Scandinavia," IZA Discussion Papers 258, Institute for the Study of Labor (IZA).
  27. James J. Heckman, 1977. "Dummy Endogenous Variables in a Simultaneous Equation System," NBER Working Papers 0177, National Bureau of Economic Research, Inc.
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  29. Manski, Charles F, 1993. "Identification of Endogenous Social Effects: The Reflection Problem," Review of Economic Studies, Wiley Blackwell, vol. 60(3), pages 531-42, July.
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