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Unpublished Paper
The Effect of Network Ethnic Segregation on Wage Formation: The Case of Sri-Lankan Immigrants in the City of Milan, Italy
Migration, Networks (2018)
  • Luca De Benedictis
  • Valerio Leone Sciabolazza, University of Florida
  • Raffaele Vacca, University of Florida
This paper delves into well-known results on the positive effects of social networks on job search in immigrant communities, to explore the informational content provided by social networks of acquaintances and its effects on the economic attainment of Sri Lankan immigrants in Milan, Italy. Using data from a 2012 survey on personal networks and daily activity spaces of Sri Lankan immigrants in Milan, we analyze co-location and intersection of activity spaces to reconstruct the socio-centric network of likely acquaintances of interviewed immigrants. We then derive an inverse measure of the extent to which a Sri Lankan immigrant is exposed to Italian social contacts (i.e., an index of segregation from Italian contacts), based on the national composition of the personal networks of first-order contacts. Finally, we estimate the impact of this segregation index on wage formation using a spatial cross-regressive human capital earnings model. Our results confirm that brokerage between diverse social circuits has a positive and statistically significant effect on wage. At the same time, we find that this effect is less significant when information in social circuits is more heterogeneous. The highest benefits in terms of wage are associated with either high levels of social network integration in Italian society, or high levels of network segregation within the Sri Lankan community. Thus, consistently with existing theories of social capital, economic attainment increases with network integration within a single national community. However, integration within a single national community reduces the chance to benefit from the diverse information provided by members of different communities. A number of innovative robustness checks are provided to assess the consistency of our econometric results, using both structural and Bayesian approaches.
  • Human capital earning function,
  • Spatial models,
  • International migration,
  • Network formation and analysis
Publication Date
Winter January 3, 2018
Citation Information
Luca De Benedictis, Valerio Leone Sciabolazza and Raffaele Vacca. "The Effect of Network Ethnic Segregation on Wage Formation: The Case of Sri-Lankan Immigrants in the City of Milan, Italy" Migration, Networks (2018)
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