Ethnic Networks and Location Choice of Immigrants
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SHOLEH A. MaaNI University of Auckland, New Zealand, and IZA, Germany Ethnic networks and location choice of immigrants Ethnic capital produced by local concentration of immigrants generates greater economic activity Keywords: migrants, ethnic capital, networks, economic resources, location choices ELEVATOR PITCH Sources of employment support by (non-)immigrants 70% Immigrants can initially face significant difficulties integrating Private employment agencies into the economy of the host country, due to information 60% Relatives/friends 50% gaps about the local labor market, limited language 40% proficiency, and unfamiliarity with the local culture. 30% Settlement in a region where economic and social networks 20% 10% based on familiar cultural or language factors (“ethnic 0% capital”) exist provides an effective strategy for economic integration. As international migration into culturally diverse countries increases, ethnic networks will be important Native-born Native-born Native-born Native-born Native-born Native-born Native-born Native-born Native-born Foreign-born Foreign-born Foreign-born Foreign-born Foreign-born Foreign-born Foreign-born Foreign-born Foreign-born considerations in managing immigration selection, language ES DE BE LU GB FR IE PT IT proficiency requirements, and regional economic policies. Source: Based on [1]; Figure 2.24. KEY FINDINGS Pros Cons Immigrants consider existing resources and networks Secured ethnic jobs and markets can impede social created by their ethnic or cultural enclaves for integration and slow gains in language proficiency. location choices. Immigrants with minimal language skills risk Ethnic concentration reduces information costs and being trapped in low-paid jobs based on ethnic provides employment opportunities in immigrant- employment. owned enterprises, as well as opportunities for Policies that favor settlement in regions away from people with low language skills. existing ethnic enclaves may create new ethnic Ethnic concentration is particularly beneficial to networks, but the effect may be temporary due to immigrants with greater language and cultural re-settlement into larger enclaves. differences to the host country. Immigration policies with language-proficiency Ethnic networks provide financial resources and requirements are important for facilitating the business opportunities for specialized products and economic and social integration of immigrants. services in a secure market. Ethnic capital and location choices can help immigrants integrate into the labor market. AUTHOR’S MAIN MESSAGE Ethnic enclaves facilitate the economic integration of new immigrants by providing social networks and economic resources. Research shows that ethnic networks provide employment and self-employment opportunities for immigrants within the specialized ethnic economy, leading to added economic activity. Accordingly, immigration selection policies based on highly-skilled or business criteria, language proficiency, and diversity of origin countries are more likely to strengthen ethnic communities and thus lead to greater economic activity and enhanced long-term economic and social integration of immigrants. Ethnic networks and location choice of immigrants. IZA World of Labor 2016: 284 11 doi: 10.15185/izawol.284 | Sholeh A. Maani © | August 2016 | wol.iza.org SHOLEH A. MaaNI | Ethnic networks and location choice of immigrants MOTIVATION It is generally accepted in migration research that new immigrants can face disadvantages in finding a job in their new country. In contrast to the native-born population, immigrants may typically lack local language skills, social networks, knowledge of customs, and information about job opportunities and local employers [2], [3]. It is also widely accepted that the location choices and employment outcomes of immigrants are important factors that influence their social integration and economic success. A further key factor is the strength of social networks and economic resources that immigrants can access within the broader ethnic diaspora [4], [5]. Co-settlement of immigrants (i.e. the settlement of a group of immigrants in the same location) in alignment with linguistic or cultural factors can result in several ethnic enclaves in immigrant-receiving countries. Recognizing the effect of ethnic networks and resources on immigrant settlement choices, and their economic integration, has significant relevance for economic assessment and policies of immigrant-receiving countries, such as selection criteria, choice of countries of origin, and language proficiency requirements. DISCUSSION OF PROS AND CONS A large and increasing proportion of the world’s population, particularly the proportion of the population in developed countries, are migrants. The United Nations Population Fund (UNFPA) estimates the world’s immigrant population at 232 million people, or nearly 3.2% of the world’s population [6]. Research confirms that ethnic networks play a vital role in immigrants’ location choices and their employment prospects [4], [5], [7]. This line of research considers ethnicity and cultural background as a kind of “capital” for immigrants. The results highlight that through location choices, immigrants enhance their economic opportunities for integration in their host country. For example, Figures 1 and 2 show that in Australia, Sydney and Melbourne contain ethnic enclaves of immigrants from China, Vietnam, Greece, Italy, England, and other countries. While Sydney has a greater co-settlement of immigrants from the Middle East and Vietnam, Melbourne has a greater concentration of immigrants from Italy and Greece. Co-settlement patterns also show that an existing settlement by an ethnic group attracts greater geographic co-settlement by that group. The main labor market and related economic mechanisms that attract immigrants to settle in locations with an ethnic enclave are: easier and less-costly access to information about the local labor market; opportunities of employment in immigrant-owned businesses; secure and specialized markets for ethnic products; availability of start-up capital for self- employment; and a gradual move into the mainstream economy by serving the needs of the immigrant population. A growing body of literature [3], [4], [7], including recent research [5], [8], provides evidence to support these outcomes. Ethnic capital: Theory and evidence The concept of “social capital” has a long history in the social sciences, dating back to the 1890s, and has received significantly increased attention in recent decades. It describes the networks of social connections that exist between people, based on shared values 2 IZA World of Labor | August 2016 | wol.iza.org SHOLEH A. MaaNI | Ethnic networks and location choice of immigrants Figure 1. Ethnicity distribution in Sydney Philippines India England China Malta China China Minchinbury Toongabbie China Northmead China Eastwood China Amdell Park China Dundas Valley China England Fiji India North Parramatta China North Ryde Chatswood India China Prospect China New Zealand Pendle HillIndia Dundas China England Eastern Creek India England Lane Cove North Wentworthville China China West Ryde China China India England Ryde East Ryde Parramatta Rydaimere China England England Lebanon India India Lane Cove India Malta Mays Hill Harris Park India China England Pemulwuy Greystanes England China China Putney England India Italy England India South Korea Rhodes England Longueville Lebanon Lebanon Tennysori Point Hunters Hill Wollstonecraft Granville South Korea Italy Lebanon Merrylands England Iraq Newington China China Woolwich Horsley Park Woodpark Italy Wetherill Park Concord West Iraq Lebanon Italy England Guildford West Birchgrove Lebanon China Abbotsford England Lebanon Italy Italy England Iraq China Italy New Zealand Iraq South Granville China India Concord Russell Lea Balmain Bosslley Park Lebanon China England Barangaroo Prainiewood Iraq Lidcombe Homebusin Italy Italy Old Guildford Italy Rozelle Iraq Vietnam Five Dock England Abbotsbury Iraq Fairfield West Iraq Vietnam China Lilyfield Wakeley Fairfield East China China Italy England Iraq Vietnam Berala China Edensor Park Vietnam Vietnam Strathfield England England China Vietnam Vietnam Croydon Italy Canley Heights Vietnam Forest Lodge Cecil Park Iraq Villawood Vietnam China England Vietnam Canley Vale Cecil Hills Vietnam Vietnam Vietnam China England England China England Vietnam Bonnyrigg Vietnam Birrong Italy Lebanon Lebanon Italy Lewisham England Eveleigh China Vietnam Cabramatta Vietnam England Vietnam Bass Hill Vietnam Greenacre Lebanon Ashbury Greece Lansvale Erskineville Vietnam Lebanon Yagoona Belfield Dulwich Hill England China India Greece Vietnam Lebanon Georges Hall China China Warwick Farm Alexandria Busby Lebanon Lebanon Campsie Marrickville England China Fiji Greece Lebanon Ashcroft Vietnam Vietnam Mount Lewis St Peters Rosebery Vietnam Iraq India Lebanon Bankstorn Bangladesh Belmore Chipping Norton Greece Greece Macedonia Cartwright Liverpool Condell Park Iraq Lebanon Clemton Park Lebanon Tempe Fiji Bangladesh Fiji Hoxton Park Lebanon Turrella Lebanon China Eastlakes West Hoxton Lurnea England Roselands China Bardwell Park Lebanon Fiji New Zealand China Fiji Milperra Greece Arncliffe Prestons Moorebank Vietnam Mascot Hormingsea Park China China Bexley North England Revesby China Riverwood Botany India England Beverly Hills Hammondville Vietnam Padstow China China Note: Map shows the top birthplace for immigrants in each suburb. 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