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Neighbourhood Effects, Preference Heterogeneity and Immigrant Educational Attainment

  • Buly A Cardak


    (Department of Economics and Finance, La Trobe University)

  • James Ted McDonald


    (Department of Economics and Finance, University of New Brunswick Department of Economics and Finance, La Trobe University)

This paper investigates differences between the educational attainment immigrants and native born individuals in Australia by using Australian Youth Survey (AYS) data combined with aggregate Australian Census data. We decompose differences in educational attainment into: (i) typical demographic and socio-economic sources common to all ethnic groups, (ii) unobserved region of residence and region of origin effects, and (iii) neighbourhood effects such as degree and ethnic concentration of particular ethnic groups in different neighbourhoods. A theoretical model incorporating these effects is proposed but structural estimation is not possible for lack of appropriate data. Instead, a reduced form methodology is proposed and employed. The empirical results identify positive ethnic neighbourhood effects in high school completion and university enrolment for some immigrants to Australia, in particular first and second generation immigrants from Asia. The results indicate that it is not just the size of the ethnic network but the quality of the network that is important.

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Paper provided by School of Economics, La Trobe University in its series Working Papers with number 2002.02.

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Length: 32 pages
Date of creation: 2002
Date of revision:
Handle: RePEc:ltr:wpaper:2002.02
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  1. Ira N. Gang & Klaus F. Zimmermann, 2000. "Is Child like Parent? Educational Attainment and Ethnic Origin," Journal of Human Resources, University of Wisconsin Press, vol. 35(3), pages 550-569.
  2. Marianne Bertrand & Erzo F.P. Luttmer & Sendhil Mullainathan, 1999. "Network Effects and Welfare Cultures," JCPR Working Papers 62, Northwestern University/University of Chicago Joint Center for Poverty Research.
  3. Chiswick, Barry R & Miller, Paul M, 1996. "Ethnic Networks and Language Proficiency among Immigrants," Journal of Population Economics, Springer, vol. 9(1), pages 19-35, February.
  4. B.R. Chiswick & P.W. Miller, 1992. "The Determinants of Post-Immigration Investments in Education," Economics Discussion / Working Papers 92-17, The University of Western Australia, Department of Economics.
  5. Julian R. Betts & Magnus Lofstrom, 1998. "The Educational Attainment of Immigrants: Trends and Implications," NBER Working Papers 6757, National Bureau of Economic Research, Inc.
  6. Moulton, Brent R., 1986. "Random group effects and the precision of regression estimates," Journal of Econometrics, Elsevier, vol. 32(3), pages 385-397, August.
  7. Ira N. Gang, 1997. "Schooling, Parents and Country," Departmental Working Papers 199617, Rutgers University, Department of Economics.
  8. repec:tpr:qjecon:v:103:y:1988:i:3:p:571-97 is not listed on IDEAS
  9. Cardak, B.A., 1998. "Preferences Over Education Expenditure," Department of Economics - Working Papers Series 623, The University of Melbourne.
  10. Cardak, Buly A, 1999. "Heterogeneous Preferences, Education Expenditures and Income Distribution," The Economic Record, The Economic Society of Australia, vol. 75(228), pages 63-76, March.
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