AME Labour Economics Seminar: Danielle Li (MIT Sloan) presents Workplace segregation and the labour market performance of immigrants

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Abstract

Immigrants are more likely to have conationals as colleagues, however the consequences of such workplace segregation is an open question. I study the effect of the conational share in an immigrant’s first job on subsequent labour market outcomes using register data from Germany. I instrument for the conational share using hiring trends in the local labour market and find that a ten percentage-point increase in the initial conational share lowers employment rates by 3.1 percentage points six or more years after the start of the first job, an effect not observed for non-conational immigrants, with no effect on wages conditional on employment. The employment effect appears to be explained by differences in the quality of social network and subsequent job search behaviour induced by differences in the initial workplace, although differential Germany-specific human capital acquisition cannot be entirely ruled out.