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Segregation in neighbourhoods and labour market outcomes of immigrants: Evidence from random assignment in the Netherlands

Author

Listed:
  • Beckers, Pascal

    (UNU-MERIT/MGSoG, Maastricht University)

  • Borghans, Lex

    (School of Business and Economics, Maastricht University)

Abstract

How important is the integration of immigrants in society for labour market outcomes? In this paper we examine the effect of residential segregation in neighbourhoods on labour market outcomes, exploiting the random assignment of asylum seekers to neighbourhoods in the Netherlands. Using Dutch administrative data of the period 1995-2004, we know all consecutive places of residence, country of origin, and labour market income of the working population at the level of postal code areas. While OLS results reveal a considerable negative effect of non-Western migrant concentration on labour market outcomes, IV-results show that concentration has a positive effect on outcomes, especially when also other neighbourhood characteristics are controlled for. On average, immigrants residing in high concentration neighbourhoods are 29 percent more likely to be employed and have substantially higher annual wages than immigrants residing in low concentration neighbourhoods. The positive effect of neighbourhoods with high concentrations of non-Western immigrants is especially strong for recent immigrants. Evidence on the heterogeneity within the group of asylum seekers suggests that especially those who benefit most from living in a concentrated neighbourhood tend to go to these areas.

Suggested Citation

  • Beckers, Pascal & Borghans, Lex, 2011. "Segregation in neighbourhoods and labour market outcomes of immigrants: Evidence from random assignment in the Netherlands," MERIT Working Papers 2011-068, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:unumer:2011068
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    File URL: https://unu-merit.nl/publications/wppdf/2011/wp2011-068.pdf
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    Citations

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    Cited by:

    1. Jacob Nielsen Arendt & Christian Dustmann & Hyejin Ku, 2022. "Refugee migration and the labour market: lessons from 40 years of post-arrival policies in Denmark," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 38(3), pages 531-556.
    2. Tito Boeri & Marta De Philippis & Eleonora Patacchini & Michele Pellizzari, 2015. "Immigration, Housing Discrimination and Employment," Economic Journal, Royal Economic Society, vol. 125(586), pages 82-114, August.
    3. Achard, Pascal, 2022. "Ethnic Enclaves and Cultural Assimilation," Other publications TiSEM 306dc66a-300a-43c1-b7e9-c, Tilburg University, School of Economics and Management.
    4. Eric Schuss, 2020. "Do Ethnic Networks Ameliorate Education–Occupation Mismatch?," LABOUR, CEIS, vol. 34(4), pages 441-476, December.
    5. Achard, Pascal, 2022. "Ethnic Enclaves and Cultural Assimilation," Discussion Paper 2022-011, Tilburg University, Center for Economic Research.

    More about this item

    Keywords

    migration; immigrant labour market outcomes; concentration; segregation; random selection; natural experiment;
    All these keywords.

    JEL classification:

    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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