Working Paper: CEPR ID: DP2729
Authors: Per Anders Edin; Peter Fredriksson; Olof Slund
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 Codes: J15; J18; R23
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| living in ethnic enclaves (R23) | increase in earnings (J31) |
| standard deviation increase in ethnic concentration (R23) | increase in earnings (J31) |
| living in ethnic enclaves (R23) | decrease in idleness (J22) |
| not accounting for sorting (C69) | decrease in earnings (J31) |