Regional concentration and labour market success: endogenous and exogenous effects of relative minority group size

Some ethnic minorities tend to be less successful in the German labour market compared to the indigenous population even when controlling for relevant resources. The paper uses data from the German Mikrozensus to investigate to what extent the remaining ethnic disadvantages can be explained by relative minority group size. On theoretical grounds, ethnic concentration can have an impact on the members of the own minority as well as on members of other ethnic groups. The paper finds empirical evidence that a strong ethnic concentration impedes structural assimilation of Turkish migrants with a higher level of education, as the ethnic mobility trap model would suggest. however, the share of the Turkish population in a county does not only have an impact on the labour market performance of Turkish migrants (endogenous effect) but also affects the economic success of Italians and Germans (exogenous effects). The empirical results indicate, that controlling for regional concentration can - at least for some minority groups and to some extent - explain remaining ethnic disadvantages.