Social identity and labor market outcomes of immigrants

Abstract

This paper explores the relationship between social identity and labor market outcomes of immigrants. Using survey data from Italy, we provide robust evidence that integrated immigrants, who state they have strong feelings of belonging to the societies of both the host and home country, have higher employment rates than do assimilated immigrants, who identify exclusively with the host country culture. Unlike previous literature, our findings indicate that assimilation does not necessarily provide a clear labor market advantage over immigrants who identify only with their original ethnic group. The positive labor market effect of integration is especially large for women, low-skilled, and immigrants with a brief experience in Italy and arriving in Italy at older ages, who generally face stronger barriers to entry into the labor market. The main mechanism driving the positive effect of multiple social identities points to belonging to local networks that ensure in-group favoritism and sharing of information.