Abstract

This paper investigates the effects of the conditions of local labour markets on the social networks of immigrants, with an emphasis on co-ethnic contact and contact with people native to the locality. This study focuses on the case of immigrants in the Netherlands. For this case, I derived and empirically tested a job and residential search model. I found that a high job arrival rate and large wage differences between the ethnic labour market and the host labour market both correlate with immigrants developing stronger co-ethnic networks and weaker native networks as well as with immigrants choosing to live in more ethnically concentrated areas. These findings suggest that local economic prosperity does not necessarily beget social integration: in this case study, immigrants spontaneously assimilated less into the host society during a good economic period.

Highlights

  • Migrants’ network composition substantially affects their economic performances (Battisti et al 2016; Chiswick and Wang 2016; Kanas et al 2012; Lancee 2010)

  • This paper aims to fill this gap in the scholarly archive by responding to the following research questions: how do local labour market conditions impact an immigrant’s social networking? Do immigrants invest more in native networks during good economic conditions?

  • The compositions of the social networks that immigrants build in their new countries are meaningful both for their own economic performances in the destination country and for the dynamics of integration in their new society

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Summary

Introduction

Migrants’ network composition substantially affects their economic performances (Battisti et al 2016; Chiswick and Wang 2016; Kanas et al 2012; Lancee 2010). A more buoyant labour market leads to more coethnic networking and little native networking as well as the residential choice of more ethnically concentrated areas It appears that an incompatibility exists between local economic prosperity and migrants’ social integration in the sense that immigrants spontaneously assimilate less into host society when the host economy is good. This result implies that when the economy is booming, migrants are more concerned with building an ethnic community and participating in cultural activities than with optimising their job search. The final section provides concluding remarks and discusses avenues for future research

A theoretical model
A job search model
Solutions and comparative statics
Hypotheses derived from the model
An empirical analysis
Data and variables
Simultaneous equations and instrumental variables
Estimation results
Concluding remarks
Findings
Compliance with ethical standards

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