Do Birds of a Feather Flock Together? Immigration Flows and Cultural Clustering in Host Countries

This paper presents a simple theoretical framework in which immigrants have a relative incentive to cluster in host countries where cultural characteristics and imperfect information sustain the segmentation of the labor market and a higher wage in foreign communities. The hypothesis is tested on a panel of immigration flows to OECD countries. The pull effect of cultural communities is supported and it is found that the minimum size of a given cultural community is around 5% of the foreign population. It is also found that the pull effect weakens as the community grows as predicted by the theoretical framework.