Ethnic Environment during Childhood and the Educational Attainment of Immigrant Children in Sweden

We ask whether growing up with persons of the same national background (which we refer to as coethnics), in the immediate neighbourhood, influences future educational careers of children of immigrants. We use administrative data to follow an entire cohort of immigrant children who graduated from Swedish compulsory schools in 1995. We have information on their parents and on their ethnic environment during the period they were 10 – 15 years old. The dependent variable studied is the highest completed education in years at age 24. We are able to account for unobserved heterogeneity with neighbourhood fixed effects and ethnic group fixed effects. We find that the effect of the quantitative side of the ethnic environment (the number of coethnics) on educational attainment is strongly conditioned by the qualitative side of this environment (the educational success of coethnics). The individual’s educational career is positively related to the number of young coethnics in the neighbourhood, but only if they can be characterized as being educationally successful. Growing up in a large ethnic community with average or poor educational success is harmful for the future educational success. The effect of the ethnic surrounding on the highest completed education is fully mediated by success in compulsory school