Immigrant Labour Market Outcomes: The Importance of Social Networks
Anna Piil Damm
Aarhus School of Business, Aarhus University, Denmark
First, I investigate whether a large and high quality of the social network promotes employment of Non-Western immigrants. I carry out the analysis by conducting interviews in 2006 about social network characteristics and job search channels of a random sample of 4400 immigrants from Iran, Turkey and Pakistan and 1400 natives (Danes). I link the survey information with administrative records on labour market outcomes in 2006. My findings suggest that an immigrant have better employment chances if his friends and other contacts are predominantly employed and if he has a strong work ethic, while having an above average number of contacts only seem to promote employment of immigrants who lack employed contacts. Second, I investigate whether the relatively low employment rate of non-Western immigrants in Denmark can be explained by overrepresentation of non-Western immigrants in socially deprived and ethnically segregated neighbourhoods, lowering the quality of their social network. I argue that refugees were initially randomly assigned to a neighbourhood due to a Danish Spatial Dispersal Policy on Refugees. I link the survey information for refugees with information about the neighbourhood of assignment and provide quasi-experimental evidence i) that assignment to a socially vulnerable neighbourhood increases (decreases) the employment probability of male (female) refugees, ii) of negative self-selection into socially vulnerable neighbourhoods and iii) that living in a socially vulnerable neighbourhood increases the employment probability of male refugees. Further findings suggest that living in a socially vulnerable neighbourhood increases employment of male refugees due to access to a co-ethnic network.
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