Dynamic effects of co-ethnic networks on immigrants' economic success

"This paper investigates how the size of co-ethnic networks at arrival affected the economic success of immigrants in Germany. Applying panel analysis with a large set of fixed effects and controls, we isolate the association between initial network size and long-run immigrant outcomes. Focusing on refugees - assigned to an initial location independently of their choice - allows a causal interpretation of the estimated coefficient. We find that immigrants initially located in places with larger co-ethnic networks are more likely to be employed at first, but have a lower probability of investing in human capital. In the long run they are more likely to be mismatched in their job and to earn a lower wage." (Author's abstract, IAB-Doku).