Dynamic Effects of Co-Ethnic Networks on Immigrants’ Economic Success

Michele Battisti
Giovanni Peri
Agnese Romiti
Published in
The Economic Journal
Publication Date

In this paper we investigate how co-ethnic networks affect the economic success of immigrants. Using longitudinal data of immigrants in Germany and including a large set of fixed effects and pre-migration controls to address the possible endogeneity of initial location, we find that immigrants in districts with larger co-ethnic networks are more likely to be employed soon after arrival. This advantage fades after four years, as migrants located in places with smaller co-ethnic networks catch up due to greater human capital investments. These effects appear stronger for lower-skilled immigrants, as well as for refugees and ethnic Germans.

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