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The Effect of Enclave Residence on the Labour Force Activities of Immigrants in Canada

  • Tu, Jiong

    ()

    (Human Resources and Skills Development Canada - Labour Program)

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It has been well documented that immigrants' clustering of residence in large cities has been associated with the creation of a number of ethnic enclaves. The intensive exposure to own-ethnic population could affect immigrant labour market involvement positively or negatively. However, no extant Canadian research has provided empirical evidence on the sign of these enclave effects. In this paper, I use the 1981-2001 Censuses to estimate the impact of residence in ethnic enclaves on male immigrants' labour force participation rate and employment probability. For recent immigrants who arrived in Canada within the preceding ten years, the intensity of enclave residence is negatively associated with their labour force participation rate, but positively related to their employment probability in all censuses. However, living in an enclave has no significant effect on the labour force activity of older immigrants who have lived in Canada for more than twenty years. Since immigrants could be attracted to areas with more job opportunities and hence enlarge the size of an enclave, the estimated effects from probit regressions might be positively biased. I then use instrumental variable (IV) method to address this endogeneity problem, and the IV estimates are consistent with the probit regression results.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4744.

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Length: 40 pages
Date of creation: Feb 2010
Date of revision:
Handle: RePEc:iza:izadps:dp4744
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  1. Marianne Bertrand & Erzo Luttmer & Sendhil Mullainathan, 1998. "Network Effects and Welfare Cultures," Working Papers 784, Princeton University, Department of Economics, Industrial Relations Section..
  2. Kenneth Clark & Stephen Drinkwater, 2002. "Enclaves, neighbourhood effects and employment outcomes: Ethnic minorities in England and Wales," Journal of Population Economics, Springer, vol. 15(1), pages 5-29.
  3. Baker, Michael & Benjamin, Dwayne, 1994. "The Performance of Immigrants in the Canadian Labor Market," Journal of Labor Economics, University of Chicago Press, vol. 12(3), pages 369-405, July.
  4. Åslund, Olof & Edin, Per-Anders & Fredriksson, Peter, 2001. "Ethnic Enclaves and the Economic Success of Immigrants - Evidence from a Natural Experiment," CEPR Discussion Papers 2729, C.E.P.R. Discussion Papers.
  5. John M. Abowd & Richard B. Freeman, 1991. "Immigration, Trade, and the Labor Market," NBER Books, National Bureau of Economic Research, Inc, number abow91-1, October.
  6. Edward P. Lazear, 1995. "Culture and Language," NBER Working Papers 5249, National Bureau of Economic Research, Inc.
  7. Bartel, Ann P, 1989. "Where Do the New U.S. Immigrants Live?," Journal of Labor Economics, University of Chicago Press, vol. 7(4), pages 371-91, October.
  8. 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.
  9. Bloom, D. & Grenier, G. & Gunderson, M., 1993. "The Changing Labour Market Position of Canadian Immigrants," Working Papers 9305e, University of Ottawa, Department of Economics.
  10. Morissette, Rene & Frenette, Marc, 2003. "Will They Ever Converge? Earnings of Immigrants and Canadian-born Workers over the Last Two Decades," Analytical Studies Branch Research Paper Series 2003215e, Statistics Canada, Analytical Studies Branch.
  11. Casey Warman, 2006. "Ethnic Enclaves and Immigrant Earnings Growth," Working Papers 1261, Queen's University, Department of Economics.
  12. George J. Borjas, 1986. "The Self-Employment Experience of Immigrants," NBER Working Papers 1942, National Bureau of Economic Research, Inc.
  13. Joseph G. Altonji & David Card, 1991. "The Effects of Immigration on the Labor Market Outcomes of Less-skilled Natives," NBER Chapters, in: Immigration, Trade, and the Labor Market, pages 201-234 National Bureau of Economic Research, Inc.
  14. Mussaddeq Chowdhury & Roberto Pedace, 2007. "Ethnic Enclaves And Labor Markets: An Analysis Of Immigrant Outcomes In California," Contemporary Economic Policy, Western Economic Association International, vol. 25(2), pages 238-249, 04.
  15. Madeline Zavodny, 1997. "Welfare and the locational choices of new immigrants," Economic and Financial Policy Review, Federal Reserve Bank of Dallas, issue Q II, pages 2-10.
  16. David Mare & Melanie Morten & Steven Stillman, 2007. "Settlement patterns and the geographic mobility of recent migrants to New Zealand," New Zealand Economic Papers, Taylor & Francis Journals, vol. 41(2), pages 163-195.
  17. David Gray & Jeffrey Mills & Sourushe Zandvakili, 2003. "Immigration, Assimilation and Inequality of Income Distribution in Canada," University of Cincinnati, Economics Working Papers Series 2003-01, University of Cincinnati, Department of Economics.
  18. Goel, Deepti & Lang, Kevin, 2009. "The Role of Social Ties in the Job Search of Recent Immigrants," CLSSRN working papers clsrn_admin-2009-12, Vancouver School of Economics, revised 02 Feb 2009.
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