Scandinavian Working Papers in Economics

Working Paper Series,
Uppsala University, Department of Economics

No 2018:7: Ethnic Enclaves, Self-Employment and the Economic Performance of Refugees

Henrik Andersson ()
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Henrik Andersson: Department of Economics and Institute for Housing and Urban Research (IBF), Uppsala

Abstract: In this paper I estimate the causal effect of ethnic enclaves on the probability of self-employment. To account for neighborhood selection I make use of a refugee dispersal program. Results indicate that larger ethnic enclaves, measured as the share of self-employed coethnics in the municipality immigrants first arrive into, effects the probability of self-employment positively, while the share of all other coethnics has a negative effect. Results however also indicate that there is a long term economic penalty to being placed with a larger share of self-employed coethnics, an effect which is partly mediated through the choice of selfemployment.

Keywords: Immigration; Self-employment; Sweden; Foreign born; Ethnic Enclaves; Coethnics

JEL-codes: C21; J15; M13; R23

55 pages, March 18, 2018

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