Long-Term Neighborhood Effects on Integration of Immigrants: the Case of the 1951 Moluccan Boatlift
Total Page:16
File Type:pdf, Size:1020Kb
Long-term neighborhood effects on integration of immigrants: The case of the 1951 Moluccan boatlift Merve Nezihe Özera* Bas ter Weelb Karen van der Wielc** January 31, 2017 Abstract Integration of immigrants to their host countries has been much studied. However, evidence on how physical characteristics of the neighborhoods they live affect their integration is limited and ambiguous. This paper aims to estimate the impact of the physical neighborhood characteristics on immigrants’ long term education and labor market outcomes. We use administrative data on Moluccan immigrants in the Netherlands to exploit the random variation in their settlements after they had been boatlifted from Indonesia in 1951. Moluccan immigrants were assigned to residential areas called ‘woonoorden’, which differed in terms of their distance to the local native community, educational infrastructure, employment opportunities nearby, and housing structure. We analyze education and labor market outcomes of children born in these settlements after 45 to 60 years. We find that physical characteristics matter for these second generation immigrants but impacts differ between girls and boys. A kilometer increase in the distance to the local community results in 0.7% less likelihood of women having at least an upper secondary school degree. For men, the education level is not affected. Instead, we find that a kilometer increase in the distance to the local community decreases men’s income by 1.2% while having no significant effect on women’s. Our findings are instructive on the potential impacts of the location of refugee camps on further integration of refugees to host countries. Key words: immigrant, neighborhood effects, integration, Moluccan, refugee JEL classification: J15, J24, R23 a Research Centre for Education and the Labour Market (ROA), Maastricht University, The Netherlands b SEO Amsterdam Economics and University of Amsterdam, The Netherlands c CPB Netherlands Bureau for Economic Policy Analysis, The Netherlands * Corresponding author at: ROA, Maastricht University, P.O. Box 616 6200MD Maastricht, The Netherlands. T: +31 433883647, F: +31 433884914, E-mail: [email protected] ** Corresponding author at: CPB Netherlands Bureau for Economic Policy Analysis, Bezuidenhoutseweg 30 2594 AV Den Haag, The Netherlands. T: +31 652658469, E-mail: [email protected] 1. Introduction Integration of immigrants has been a long debate in highly-immigrant-receiving Western European countries due to immigrants’ lagging behind in education and labor market outcomes compared to their native counterparts. Research has been showed that immigrant-native gap in labor market achievement is persistent across generations even though younger generations catch up their native counterparts in educational attainment (Algan, Dustmann, Glitz, & Manning, 2010). Neighborhood effects and ethnic enclaves have been addressed as one of the explanations of this poor immigrant performance as minorities tend to spatially cluster together in relatively-deprived neighborhoods (e.g. Clark & Drinkwater, 2002; Cutler & Glaeser, 1997). The hypothesis that physical characteristics of neighborhoods may have a potential impact on ethnic minorities’ achievements dates back to Kain’s (1968) spatial mismatch hypothesis. Nevertheless, research to date has been focused on the impacts of ethnic concentration rather than neighborhood characteristics. Hence, this paper aims to answer the question of whether neighborhood characteristics affect educational attainment and labor market achievement of second-generation immigrants. Studies on ethnic enclaves dominate the literature of neighborhood effects on immigrant integration. Theoretical predictions on the impact of living in co-ethnically concentrated areas are ambiguous. On the one hand, immigrants can benefit from ethnic networks through information spillovers (Portes, 1998; Putnam, 1993). Support of a rooted ethnic community in the host country especially helps new- arriving immigrants find a job better matching their qualifications and so paying higher as empirically supported by many studies (e.g. Beckers & Borghans, 2011; Damm, 2009; Edin, Fredriksson, & Åslund, 2003; Patacchini & Zenou, 2012). On the other hand, living in high-density immigrant neighborhoods may impede immigrant integration in the long run. Constantly and frequently interacting with co-ethnic peers in enclaves may hamper acquisition of country-specific human capital (Borjas, 1995) such as fluency in local language (Chiswick, 1991; Chiswick, 1995; Lazear, 1999). Furthermore, values and norms’ being easily transferred in ethnic neighborhoods may lead to peer or role model effects. For instance, living in segregated neighborhoods where few adults have steady jobs may decrease an individual’s motivation to search for a job and to work (Wilson, 2012). How physical characteristics of neighborhoods affect immigrants’ integration has got less attention in this strand of literature. One exception is Kain’s (1968) work on the impact of distance between ghettos and suburban jobs in the US on blacks’ employment opportunities. According to the spatial mismatch hypothesis of Kain (1968), minority groups are economically at a disadvantaged position since their access to information about the existing job opportunities is limited due to segregation. Moreover, living in a segregated neighborhood distant from job centers increases both search and commuting costs so minorities have less incentive to apply for jobs which would be a match otherwise. Furthermore, even if they apply, employers might not be willing to hire them as they tend to hire individuals living close by and not being reacted by the local community. Although Kain (1968) found a negative relationship between distance to job and share of nonwhites in employment supporting his hypothesis, evidence provided by later studies is mixed1. Kain’s (1968) study provides a helpful starting point to hypothesize potential impacts of neighborhood characteristics on socioeconomic outcomes of immigrants. However, it does not say much about how location of neighborhoods may affect access to amenities which improve human capital and so future life outcomes of immigrants. It may be due to the concentration of the hypothesis on minorities living in inner-city ghettos, especially in the US. However, residential areas and living arrangements vary 1 See Jencks & Mayer (1990) and Ihlanfeldt & Sjoquist (1998) for a review. 1 across immigrant groups. For instance, refugee camps are often placed in the periphery of cities or in rural areas (Diken, 2004). Location of immigrant neighborhoods may affect availability of or access to facilities such as good-quality healthcare and education which are important for especially second- generation immigrants’ catching up their native counterparts. In this respect, neighborhood effects on the integration of second-generation immigrants intersect with another strand of literature on the impact of early childhood environment on later life outcomes. However, this literature also provides a mixed evidence on the presence of neighborhood effects. While several studies exploiting random assignment of families to different neighborhoods found significant improvements in children’s educational attainment (Gould, Lavy, & Paserman, 2004; Gould, Lavy, & Paserman, 2011), likelihood of being employed at later ages (Gould, Lavy, & Paserman, 2011), and health outcomes (Katz, Kling, & Liebman, 2001), others found only limited effects (e.g. Oreopoulos, 2003; Sanbonmatsu, Kling, Duncan, & Brooks-Gunn, 2006). In this regard, there is no consensus on the presence and magnitude of neighborhood effects on children’s later life outcomes and second-generation immigrants’ achievements. Our study aims to fill this gap in the literature by providing further empirical evidence on whether or not neighborhoods matter for immigrant integration. We test whether physical characteristics of neighborhoods have any effect on second-generation immigrant children’s educational attainment and income in the long term. We use the administrative data of the children of Moluccan immigrants who arrived to the Netherlands in 1951 and randomly assigned to 90 residential areas called ‘woonoorden’. These residential areas differ from each other in their size, their distance to native towns and city centers, in type of the houses that new-arriving Moluccans lived, and in availability of other facilities such as primary school and work opportunity nearby. Second-generation Moluccans who were born in those settlements were traced in administrative records of Statistics Netherlands. Their education and labor market outcomes were obtained when they reached to ages of 45 to 62, which allow us to study the potential long-term impacts of neighborhoods on the integration of second-generation immigrants. Our results show that a kilometer increase in the distance to local community results in 0.7% less likelihood of women’s having a upper secondary school degree while having employment opportunity nearby a settlement increases the likelihood of women’s being active in labor market at age 55 by 5.2%. We also find that a kilometer increase in the distance to local community decreases men’s income by 1.2%. We did not find robust significant results for the impact of housing structure and presence of primary school in settlements. We constructed a control group of Dutch natives who were born in the same time period in the same municipalities where Moluccan settlement