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

NBER Working Paper No. 22389

Issued in July 2016, Revised in May 2018

NBER Program(s):Labor Studies



This paper investigates how the size of co-ethnic networks at the time of arrival affect 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. we also look at those who were assigned to an initial location independently of their choice allows a causal interpretation of our estimates. 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.

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Document Object Identifier (DOI): 10.3386/w22389

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