Immigrant Communities, Human Capital Externalities And Labor Market Outcomes

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Abstract

The three essays that encompass this dissertation contribute to our understanding of the economic impact of ethnic communities on immigrants while also addressing issues associated with the identification and measurement of ethnic enclaves. Immigrant enclaves provide access to ethnic goods and trade partners with shared language and culture, potentially resulting in increased job opportunities. However, these same amenities may also decrease incentives to assimilate, or acquire U.S.specific human capital, and can ultimately keep some immigrants from achieving economic success. The first essay considers whether the human capital of an ethnic community influences the decision to become self-employed, for example by affecting certain costs, such as transaction and information costs, associated with entrepreneurship. I find that immigrants with low levels of human capital are more likely to enter into self-employment if their ethnic communities have higher levels of human capital while immigrants with more human capital, such as those with a college education, enter into self-employment independently of the human capital available in their ethnic communities. These ethnic human capital externalities may play an important role in the economic assimilation of low human capital immigrants by potentially offsetting some of the economic costs associated with low education and limited English skills. The second and third essays use unique linked employer-household data available through the U.S. Census Bureau's Longitudinal Employer-Household Dynamics program to identify individuals as part of an enclave economy based not only on their neighbors - the strategy employed by the current literature - but also on their coworkers. In the second essay, I create and analyze measurements of immigrant enclaves based on both residential and employment clustering behavior. These measures show that, even among the largest immigrant groups in five of the biggest immigrant population centers in the U.S., few immigrants live or work in neighborhoods and workplaces with high co-ethnic exposure rates. Though ethnic enclaves can provide economic opportunities for their members by generating or matching individuals to employment opportunities, they may also stifle assimilation and create human capital traps by limiting interactions between enclave members and non-members. In the third essay, I find that higher residential and workplace clustering is consistently correlated with lower earnings. While negative self-selection fully explains the lower earnings attributed to higher co-ethnic exposure for immigrants with a high school education or less, I find evidence of human capital traps for immigrants with more than a high school education who enclave. Their earnings decrease with higher levels of co-ethnic exposure both residentially and in the workplace.

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2012-01-31
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Immigration; Enclaves; Human Capital
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Committee Chair
Kahn, Lawrence M
Committee Co-Chair
Abowd, John Maron
Committee Member
Blau, Francine D
Degree Discipline
Economics
Degree Name
Ph. D., Economics
Degree Level
Doctor of Philosophy
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dissertation or thesis
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