The incompatibility of local economic prosperity and migrants’ social integration: evidence from the Netherlands

Abstract

This paper investigates the effects of the conditions of local labour markets on the social networks of immigrants, with an emphasis on co-ethnic contact and contact with people native to the locality. This study focuses on the case of immigrants in the Netherlands. For this case, I derived and empirically tested a job and residential search model. I found that a high job arrival rate and large wage differences between the ethnic labour market and the host labour market both correlate with immigrants developing stronger co-ethnic networks and weaker native networks as well as with immigrants choosing to live in more ethnically concentrated areas. These findings suggest that local economic prosperity does not necessarily beget social integration: in this case study, immigrants spontaneously assimilated less into the host society during a good economic period.