Ethnic enclaves and employment in England and Wales

Abstract

This paper examines the effects of ethnic enclaves on the employment probability of ethnic minorities living in England and Wales. Controlling for the endogeneity of residential location we find that living in a high own ethnic concentration area has no systematic effect across all ethnic groups. However, once we disaggregate we find that for some ethnic groups (Indians) enclaves seem to have a positive and significant impact on their employment probability while for other groups (Caribbeans and African-Asians), enclaves have a negative and significant impact. These results are non-trivial and are in accordance with a set of theoretical views in this literature that argue that ethnic spatial concentration can have positive as well as negative effects. The perceived disadvantages of ethnic enclaves are not omnipresent. What seem to be driving this are the differences in the quality of ethnic enclaves where Indian enclaves by being more dynamic in terms of self-employment create more jobs for others within the enclave.