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Do as the Neighbors Do: The Impact of Social Networks on Immigrant Employment


  • Andersson, Fredrik

    () (Lund University)

  • Burgess, Simon

    () (University of Bristol)

  • Lane, Julia

    () (New York University)


Substantial immigrant segregation in the United States, combined with the increase in the share of the U.S. foreign-born population, have led to great interest in the causes and consequences of immigrant concentration, including those related to the functioning of labor markets. This paper provides robust evidence that both the size and the quality of an immigrant enclave affects the labor market outcomes of new immigrants. We develop new measures of the quality, or information value, of immigrant networks by exploiting data based on worker earnings records matched to firm and Census information. We demonstrate the importance of immigrant employment links: network members are much more likely than other immigrants to be employed in the same firm as their geographic neighbors. Immigrants living with large numbers of employed neighbors are more likely to have jobs than immigrants in areas with fewer employed neighbors. The effects are quantitatively important and robust under alternative specifications. For example, in a high value network – one with an average employment rate in the 90th percentile – a one standard deviation increase in the log of the number of contacts in the network is associated with almost a 5% increase in the employment rate. Earnings, conditional on employment, increase by about 0.7%.

Suggested Citation

  • Andersson, Fredrik & Burgess, Simon & Lane, Julia, 2009. "Do as the Neighbors Do: The Impact of Social Networks on Immigrant Employment," IZA Discussion Papers 4423, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp4423

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    References listed on IDEAS

    1. Per-Anders Edin & Peter Fredriksson & Olof Åslund, 2003. "Ethnic Enclaves and the Economic Success of Immigrants—Evidence from a Natural Experiment," The Quarterly Journal of Economics, Oxford University Press, vol. 118(1), pages 329-357.
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    4. B.R. Chiswick & P.W. Miller, 2000. "Do Enclaves Matter in Immigrant Adjustment?," Economics Discussion / Working Papers 00-19, The University of Western Australia, Department of Economics.
    5. Cutler, David M. & Glaeser, Edward L. & Vigdor, Jacob L., 2008. "When are ghettos bad? Lessons from immigrant segregation in the United States," Journal of Urban Economics, Elsevier, vol. 63(3), pages 759-774, May.
    6. 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.
    7. 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.
    8. Thomas Bauer & Gil Epstein & Ira Gang, 2005. "Enclaves, language, and the location choice of migrants," Journal of Population Economics, Springer;European Society for Population Economics, vol. 18(4), pages 649-662, November.
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    11. John J. Abowd & John Haltiwanger & Julia Lane, 2004. "Integrated Longitudinal Employer-Employee Data for the United States," American Economic Review, American Economic Association, vol. 94(2), pages 224-229, May.
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    16. John M. Abowd & Bryce E. Stephens & Lars Vilhuber & Fredrik Andersson & Kevin L. McKinney & Marc Roemer & Simon Woodcock, 2009. "The LEHD Infrastructure Files and the Creation of the Quarterly Workforce Indicators," NBER Chapters,in: Producer Dynamics: New Evidence from Micro Data, pages 149-230 National Bureau of Economic Research, Inc.
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    Cited by:

    1. Yves Zenou, 2013. "Social Interactions and the Labor Market," Revue d'économie politique, Dalloz, vol. 123(3), pages 307-331.
    2. Damm, Anna Piil, 2014. "Neighborhood quality and labor market outcomes: Evidence from quasi-random neighborhood assignment of immigrants," Journal of Urban Economics, Elsevier, vol. 79(C), pages 139-166.
    3. Riccardo Faini & Steiner Strom & Alessandra Venturini & Claudia Villosio, 2009. "Are Foreign Migrants more Assimilated than Native Ones?," LABORatorio R. Revelli Working Papers Series 96, LABORatorio R. Revelli, Centre for Employment Studies.
    4. Sergio Vergalli, 2011. "Entry and Exit Strategies in Migration Dynamics," Journal of Labor Research, Springer, vol. 32(4), pages 362-389, December.
    5. Aparicio Fenoll, Ainhoa, 2011. "Network Effects on Migrants' Remittances," IZA Discussion Papers 5657, Institute for the Study of Labor (IZA).
    6. Nabanita Datta Gupta & Lene Kromann, 2014. "Differences in the labor market entry of second-generation immigrants and ethnic Danes," IZA Journal of Migration, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-22, December.
    7. Julia Beckhusen & Raymond J.G.M. Florax & Thomas Graaff & Jacques Poot & Brigitte Waldorf, 2013. "Living and working in ethnic enclaves: English Language proficiency of immigrants in US metropolitan areas," Papers in Regional Science, Wiley Blackwell, vol. 92(2), pages 305-328, June.
    8. Beckhusen, Julia & Florax, Raymond J.G.M. & de Graaff, Thomas & Poot, Jacques & Waldorf, Brigitte, 2012. "Living and Working in Ethnic Enclaves: Language Proficiency of Immigrants in U.S. Metropolitan Areas," IZA Discussion Papers 6363, Institute for the Study of Labor (IZA).
    9. Strom, Steinar & Venturini, Alessandra & Villosio, Claudia, 2013. "Wage Assimilation: Migrants versus Natives and Foreign Migrants versus Internal Migrants," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201341, University of Turin.
    10. Del Bello, Carlo L. & Patacchini, Eleonora & Zenou, Yves, 2015. "Neighborhood Effects in Education," IZA Discussion Papers 8956, Institute for the Study of Labor (IZA).

    More about this item


    social networks; immigrant enclaves; labor market intermediaries;

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General

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