Wealth Accumulation and Residential Segregation: Second-Generation Immigrants During the First Mass Migration

What is the long-run impact of growing up in a segregated enclave? This paper examines the relationship between residential segregation in childhood and wealth outcomes later in life. I use a new sample of Irish, German, and English children linked from their childhood in 1850 to their adult outcomes in 1870. Conditional on childhood characteristics, such as the wealth of the father, I find a small negative association between childhood residential segregation from the US-born in 1850 and an individual’s percentile rank of wealth in 1870, suggesting there is little detriment to growing up in an enclave. This association is also weak by sending country and urban status. These results are robust to measuring wealth outcomes as the change in wealth relative to an individual’s father in 1850. Overall, the results suggest that fears of nativists during the mid-19th century about immigrant enclaves were unfounded.