Immigrants' socio-economic achievements and cultural diversity Economic effects of individual and local cultural capital

Purpose -An interest in social transmission as a source of welfare and income inequality in a society has re-emerged recently with new vigour in leading economic research (see Piketty, 2014). This paper presents a mixed Bourdieu-Mincer (B-M) type micro-economic model which provides a testable mechanism for culturally biased socio-economic inter-generational transmission. In particular, the operationalisation of this mixed B-M type model seeks to find evidence for individual and local cultural capital effects on the economic achievements, in addition to the human capital effect, for both migrants and locals in the Netherlands. The purpose of this paper is to examine two sources of wage differential in the local labour market, namely: individual cultural capital (approximated by immigrant background), which affects schooling results; and the local cultural capital (approximated with the cultural milieu), which directly biases the selection of employees. Design/methodology/approach -The study utilises the 2007-2009 data set for higher professional education (in Dutch termed HBO) graduates registered in the Maastricht database. The Mincer-type equation is augmented with a control variable for the local cultural milieu. The authors cope with this model empirically by means of 2SLS and 3SLS methods. Findings - The authors find convincing evidence for the existence of both an individual cultural capital and a local cultural capital effect on schooling and wage differentials. This can be interpreted as a migrant background effect leading to a disadvantaged position on the labour market due to less frequently attending high-quality secondary schools. Originality/value - More importantly, the authors find evidence for a classical Myrdalian effect of self-fulfilling prophecy, in which graduates with second-generation migrant background have a disadvantaged position due to access only to poorer quality of schooling.