Ethnic-Occupational Niches

Eli Locke, Boston University

Why are some ethnic or immigrant groups vastly over-represented in certain occupations? In this paper, I analyze the causes and consequences of these so-called ethnic-occupational niches. I do so by examining the quintessential case of Jewish (immigrant) garment workers from 1850 to 1940. The historical record indicates that Jewish immigrants came to the U.S. with a comparative advantage in trading garments. This pre-migration, European over-representation is supported by newly digitized data. The U.S. garment industry revolved around a putting-out system dependent on co-ethnic networks. I then build a model that encodes these two mechanisms and derive implications for niche formation. A minority group endowed with a comparative advantage in a skilled occupation will indeed cause a niche, but social networks are needed to drive increasing over-representation. Interestingly, the model predicts that over-representation directly implies a misallocation of talent across the economy. Next, by applying the ingenious Jewish Names Index (Abramitzky, Boustan, Connor 2020) to the full count U.S. Censuses, I depict the emergence of the Jewish garment niche at a previously infeasible level of spatial and temporal detail. Jewish over-representation in the garment industry increased from 1850 onward and peaked in 1900, at which point, Jews were over-represented ten-to-one as both tailors and peddlers nationally. Second-generation Jews experienced substantial upward mobility out of tailoring and into high-skilled occupations. Finally, regressions consider historical ethnic-occupational niches writ large, across all occupations and immigrant groups. I construct a novel instrument and provide evidence of a positive, significant effect of the proportion of one’s incumbent co-ethnics in a given occupation, on the probability of new arrivals entering that occupation. Altogether, my findings are in line with those regarding immigrant networks in the U.S. today, thereby reaffirming the connection between niches, past and present.

No extended abstract or paper available

 Presented in Session 24. Evolution and Change in Labor Markets