Network Effects, Ethnic Capital and Immigrants' Earnings Assimilation: Evidence from a Spatial, Hausman-Taylor Estimation

39 Pages Posted: 4 Sep 2015

See all articles by Sholeh A. Maani

Sholeh A. Maani

University of Auckland

Xingang Wang

University of Auckland

Alan Rogers

University of Auckland

Abstract

Do ethnic enclaves assist or hinder immigrants in their economic integration? In this paper we examine the effect of 'ethnic capital' (e.g. ethnic network and ethnic concentration) on immigrants' earnings assimilation. We adopt a "spatial autoregressive network approach" to construct a dynamic network variable from micro-panel-data to capture the effects of spatial-ethnic-specific resource networks for immigrants. The spatial lag structure is combined with a Hausman-Taylor (1981) panel data model, which allows for some endogeneity. We examine the effects of ethnic capital and human capital using an eight-year Australian panel data set (HILDA). Results show that immigrants' labor market integration is significantly affected by the local concentration and resources of their ethnic group.

Keywords: assimilation, ethnic capital, ethnic network, ethnic concentration, spatial autoregressive lag model, panel data

JEL Classification: J30, J31, Z13, Z18

Suggested Citation

Maani, Sholeh A. and Wang, Xingang and Rogers, Alan, Network Effects, Ethnic Capital and Immigrants' Earnings Assimilation: Evidence from a Spatial, Hausman-Taylor Estimation. IZA Discussion Paper No. 9308, Available at SSRN: https://ssrn.com/abstract=2655348

Sholeh A. Maani (Contact Author)

University of Auckland ( email )

Graduate School of Management
Private Bag 92019
Auckland, 1142
New Zealand
64-9-923-7346 (Phone)

Xingang Wang

University of Auckland

Alan Rogers

University of Auckland ( email )

Private Bag 92019
Com. A, room: 111
Auckland
New Zealand
64-9-373-7599 extn: 7148 (Phone)

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