Tian Lou

Abstract: While previous literature has found that ethnic segregation positively affects immigrants’ labor market outcomes, other papers have found the opposite. A number of studies have reconciled these conflicting findings by showing that segregation is more beneficial to immigrants from high income or well-educated ethnic groups. In this paper, we further investigate how segregation effects vary with immigrants’ education levels. We also test the differential segregation effects for immigrants with different education levels and from ethnic groups with different average education levels. We find that ethnic segregation, when the ethnic group average education level is held constant, has a more significant reductive effect on high-skill immigrants’ wages. Furthermore, living in highly-segregated enclaves in a group with low average education levels is especially harmful to the wages of low-skill immigrants. This may be because competition for the limited number of jobs in ethnic enclaves drives low-skill immigrants’ wages down. Finally, we did not find any significant segregation effects on immigrant employment.