Working Paper: NBER ID: w4912
Authors: George J. Borjas
Abstract: The socioeconomic performance of today's workers depends not only on parental skills, but also on the average skills of the ethnic group in the parent's generation (or ethnic capital). This paper investigates the link between the ethnic externality and ethnic neighborhoods. The evidence indicates that residential segregation and the external effect of ethnicity are linked, partly because ethnic capital summarizes the socioeconomic background of the neighborhood where the children were raised. Ethnicity has an external effect, even among persons who grow up in the same neighborhood, when children are exposed frequently to persons who share the same ethnic background.
Keywords: Ethnicity; Human Capital; Neighborhood Effects; Intergenerational Mobility
JEL Codes: J15; J24; R23
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Residential segregation (R23) | Socioeconomic performance (P27) |
| Ethnic capital (Z13) | Skills of the next generation (O35) |
| Ethnic capital (Z13) | Intergenerational mobility (J62) |
| Ethnic neighborhoods (R23) | Skill accumulation (J24) |
| Ethnic spillover effect (J15) | Intergenerational improvement for disadvantaged groups (I24) |
| Ethnic spillover effect (J15) | Regression towards the mean for advantaged groups (I24) |