Residential and industrial enclaves and labor market outcomes among migrant workers in Shenzhen, China

This study examines the association between participation in localistic enclaves and labour market outcomes among internal migrants in Shenzhen, China. Using data from the 2005 mini-census, we examine native-place residential enclaves and industrial enclaves on the basis of migrants' counties of origin, residential neighbourhoods, and two-digit industrial sectors, and report four main findings. First, migrants who live in native-place residential enclaves tend to earn less than those who do not, but migrants who work in industrial enclaves tend to earn more than those working in the open economy. Second, the earnings disadvantage of new arrivals relative to established migrants is smaller in a residential enclave than that outside an ethnic enclave, and the advantage of working in industrial enclaves disappears for those new arrivals, compared to migrants who have left their place of origin more than five years. Third, the earnings return to years of schooling is smaller for migrants who live in or work in native-place enclaves than for those who do not. Finally, migrants in residential or industrial enclaves are more likely to be self-employed or to be employers. Our findings suggest that residential and economic enclaves may play different roles in labour market outcomes.