NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Dynamic Effects of Co-Ethnic Networks on Immigrants' Economic Success

Michele Battisti, Giovanni Peri, Agnese Romiti

NBER Working Paper No. 22389
Issued in July 2016
NBER Program(s):LS

This paper investigates how the size of co-ethnic networks at arrival affected the economic success of immigrants in Germany. Applying panel analysis with a large set of fixed effects and controls, we isolate the association between initial network size and long-run immigrant outcomes. Focusing on refugees – assigned to an initial location independently of their choice – allows a causal interpretation of the estimated coefficient. We find that immigrants initially located in places with larger co-ethnic networks are more likely to be employed at first, but have a lower probability of investing in human capital. In the long run they are more likely to be mis-matched in their job and to earn a lower wage.

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Document Object Identifier (DOI): 10.3386/w22389

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