Diversity and Employment Prospects: Neighbors Matter!
IEB Working Paper N. 2015/04
43 Pages Posted: 20 Mar 2015
Date Written: February 9, 2015
This paper explores how diversity affects individuals’ employment prospects, using data from the French Labor Force Survey. Employment correlates positively with local labor market diversity, but negatively with neighborhood diversity. Using an instrumental variable approach to deal with local labor market diversity drives the positive correlation to zero, confirming the suspicion of self-selection. Regarding neighborhood diversity, I adopt the strategy of Bayer et al. (2008), taking advantage of the very precise localization of the data: the negative effect of diversity is reinforced. I also show that nationality-based diversity matters more than parents’ origin-based diversity, giving insights on the underlying mechanisms.
Keywords: Diversity, employment, neighborhood effects
JEL Classification: J15, J60, R23, Z13
Suggested Citation: Suggested Citation