Do Ethnic Networks Ameliorate Education–Occupation Mismatch?

The question to what extent ethnic networks affect occupational mismatch has so far been overlooked. This paper exploits supraregional variation in ethnic composition in Germany and shows that a one standard deviation increase in the share of the own ethnic group per zip code significantly reduces the years of overqualification for females, by 0.27 years. For males, neither the foreign share nor the ethnic share per residency area is found to significantly impact the extent of overqualification. Selection into residency groups and occupations and different endowments in language capital explain the more efficient benefit of ethnic networks accrued to females.