Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/36293
Year of Publication: 
2009
Series/Report no.: 
IZA Discussion Papers No. 4423
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
Substantial immigrant segregation in the United States, combined with the increase in the share of the U.S. foreign-born population, have led to great interest in the causes and consequences of immigrant concentration, including those related to the functioning of labor markets. This paper provides robust evidence that both the size and the quality of an immigrant enclave affects the labor market outcomes of new immigrants. We develop new measures of the quality, or information value, of immigrant networks by exploiting data based on worker earnings records matched to firm and Census information. We demonstrate the importance of immigrant employment links: network members are much more likely than other immigrants to be employed in the same firm as their geographic neighbors. Immigrants living with large numbers of employed neighbors are more likely to have jobs than immigrants in areas with fewer employed neighbors. The effects are quantitatively important and robust under alternative specifications. For example, in a high value network - one with an average employment rate in the 90th percentile - a one standard deviation increase in the log of the number of contacts in the network is associated with almost a 5% increase in the employment rate. Earnings, conditional on employment, increase by about 0.7%.
Subjects: 
Social networks
immigrant enclaves
labor market intermediaries
JEL: 
J61
J20
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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