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Dynamic Effects of Co-Ethnic Networks on Immigrants' Economic Success

Listed author(s):
  • Michele Battisti
  • Giovanni Peri
  • Agnese Romiti

This paper investigates how the size of co-ethnic networks at arrival affected the economic success of immigrants in Germany. Applying panel analysis with a large set of fixed effects and controls, we isolate the association between initial network size and long-run immigrant outcomes. Focusing on refugees – assigned to an initial location independently of their choice – allows a causal interpretation of the estimated coefficient. We find that immigrants initially located in places with larger co-ethnic networks are more likely to be employed at first, but have a lower probability of investing in human capital. In the long run they are more likely to be mis-matched in their job and to earn a lower wage.

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File URL: http://www.nber.org/papers/w22389.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 22389.

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Date of creation: Jul 2016
Handle: RePEc:nbr:nberwo:22389
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  14. Yu Xie & Margaret Gough, 2011. "Ethnic Enclaves and the Earnings of Immigrants," Demography, Springer;Population Association of America (PAA), vol. 48(4), pages 1293-1315, November.
  15. 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.
  16. Eleonora Patacchini & Yves Zenou, 2012. "Ethnic Networks and Employment Outcomes," CReAM Discussion Paper Series 1202, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  17. Montgomery, James D, 1991. "Social Networks and Labor-Market Outcomes: Toward an Economic Analysis," American Economic Review, American Economic Association, vol. 81(5), pages 1407-1418, December.
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