Ethnic Enclaves and the Economic Success of Immigrants - Evidence from a Natural Experiment

42 Pages Posted: 12 Apr 2001

See all articles by Per-Anders Edin

Per-Anders Edin

Uppsala University - Department of Economics; Centre for Economic Policy Research (CEPR)

Peter Fredriksson

Uppsala University - Department of Economics; IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: March 2001

Abstract

Recent immigrants tend to locate in ethnic "enclaves" within metropolitan areas. The economic consequence of living in such enclaves is still an unresolved issue. We use an immigrant policy initiative in Sweden, when government authorities distributed refugee immigrants across locales in a way that may be considered exogenous. This policy initiative provides a unique natural experiment, which allows us to estimate the causal effect on labour market outcomes of living in enclaves. We find substantive evidence of sorting across locations. When sorting is taken into account, living in enclaves improves labour market outcomes; for instance, the earnings gain associated with a standard deviation increase in ethnic concentration is in the order of 4-5%.

Keywords: Enclaves, immigration, labour market outcomes

JEL Classification: J15, J18, R23

Suggested Citation

Edin, Per-Anders and Fredriksson, Peter, Ethnic Enclaves and the Economic Success of Immigrants - Evidence from a Natural Experiment (March 2001). Available at SSRN: https://ssrn.com/abstract=266617

Per-Anders Edin (Contact Author)

Uppsala University - Department of Economics ( email )

SE-75120 Uppsala
Sweden
+46 18 471 10 97/7 (Phone)
+46 18 471 70 78 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Peter Fredriksson

Uppsala University - Department of Economics ( email )

SE-75120 Uppsala
Sweden
+46 18 471 7079 (Phone)
+46 18 471 1478 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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