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Contrary to other immigrant-receiving countries, the impact of co-ethnic neighbourhoods on immigrants’ life outcomes has been understudied in Australia. Using microdata from the 2006–2016 Australian Census Longitudinal Dataset, this paper estimates the causal impact of the size of co-ethnic neighbourhoods on immigrant labour force participation, employment, hours worked, and income. We address the fundamental problem of individual and location sorting by applying individual-fixed effects, controlling for residential mobility, and using an exogenous measure of co-ethnic neighbourhood size. We found a negative effect on labour participation and income when we do not control for residential mobility. However, when we control for residential mobility, residence in co-ethnic neighbourhoods is no longer statistically significant and the point estimates are tiny, which highlight the importance of stringent methodological choices that control for settlement trajectories. Our findings suggest that efforts by the Australian government to settle immigrants in regional areas with a limited migrant population should not affect the labour market outcomes of immigrants.
Dr Toan Nguyen is a Research Fellow at the Development Policy Centre, Crawford School of Public Policy, ANU.
This presentation is based on a research paper, co-authored by the speaker. The draft paper is available upon request.
This seminar is part of the Labour mobility and the Pacific webinar series.