Borjas, George J.
Ethnicity, Neighborhoods, and Human Capital Externalities
Investigates the link between ethnic externality and ethnic neighborhoods
Journal Name or Institutional Affiliation:
National Bureau of Economic Research
Working Paper No. 4912, November
- Census and NLSY data show strong patterns of residential segregation by ethnic group.
- Ethnicity has an external effect on the human capital accumulation process.
- Residential segregation is linked to the influence of ethnic capital on the process of intergenerational mobility.
- Ethnic capital functions through neighborhood effects that influence intergenerational mobility.
- Neighborhood effects alone do not account for the effect of ethnicity or intergenerational mobility, particularly for residents of ethnically segregated neighborhoods.
- Ethnicity has an impact above and beyond parental and neighborhood effects for people who are frequently exposed to an ethnic environment.
- Residential segregation and the external effect of ethnicity are linked, partly because ethnic capital summarizes the socioeconomic background of the neighborhood where the children were raised.
- Ethnicity has an external effect, even among persons who grow up in the same neighborhood, when children are exposed frequently to persons who share the same ethnic background.
Academic Achievement, Ethnicity, Human Capital, Neighborhood, Residential Segregation
Secondary Survey Data
Method of Analysis:
Fixed Effects Regression Models
Unit of Analysis:
- The data are from the 1/100 Neighborhood File of the 1970 Public Use Sample of the US Census and the National Longitudinal Surveys of Youth (NLSY).
- The NLSY provides ethnicity and ancestry information.
- The Census file is used for individual demographic data and locates people into 42,950 neighborhoods that are equivalent to Census tracts.
- The data identifies college graduates and first or second generation immigrant status.
- This study analyzes persons ages 18-64.
- DV: Skills (such as educational attainment or the log wage) of person I in ethnic group j.
- IV: Skills of his father, average skills of the ethnic group in father's generation (ethnic capital), neighborhood fixed effects.