Entering the Mainstream Economy? Workplace Segregation and Immigrant Assimilation

This is the authors' abstract. We don't add key points for this paper.

Why do foreign-born workers often concentrate in low-wage workplaces with high shares of minority employees? Do native-born children of immigrants—who often acquire better language skills, more education, and improved country-specific skills—experience reduced workplace segregation relative to natives and better access to the mainstream economy than the immigrant generation? Using rich linked employer–employee administrative data from Norway, we show that, on average, 32% and 16% of immigrants’ and children of immigrants' coworkers have immigrant backgrounds, compared to 7% among natives. For economic segregation, the percentile rank of coworkers’ salary is, on average, 36, 49, and 52 for immigrants, children of immigrants, and natives, respectively. A formal decomposition shows that variation in the characteristics of employees, workplaces, and residential neighborhoods collectively explain 54–74% and 79–84% of ethnic and economic workplace segregation for immigrants and their children. Within both immigrant generations, minority workers' education and occupational attainment, detailed industry of employment, working for an immigrant manager, and the share of immigrant neighbors make the largest contribution to workplace segregation relative to natives. This suggests that both skill-based sorting and network-related processes are key drivers of immigrant–native workplace segregation. However, children of immigrants’ improved access to less immigrant-dense and higher-paying workplaces compared to the immigrant generation is almost entirely attributable to differences in skill-based sorting (i.e., education, occupation, and sorting across detailed industries). These findings reveal sharp declines in workplace segregation relative to natives across immigrant generations, as children of immigrants advance into workplaces in the mainstream economy.