Labor Market Effects of Language Enclaves: Hispanic Men in the United States

In a model of a labor market with enclaves of Spanish speakers, a large enclave provides better jobs for persons lacking skills in English. Consequently, the larger enclave lowers earnings returns to English. Returns to English also vary with the distribution of English skills among Spanish-speaking workers. Returns to English rise if the distribution becomes skewed toward less proficiency in English and fall if it becomes skewed toward more proficiency in English. The model has broad implications for the consequences of enclaves. The model is tested with an application to Hispanic men in the United States using the 1980 Census of Population. Empirical results are consistent with theoretical predictions: enclaves do reduce the earnings losses associated with limited English skills for Hispanic men, and increasing the fraction of Hispanic men who speak English only does lower the returns to English.