Segregation preferences and labour market outcomes Ken Clark a,c, ⁎ , Stephen Drinkwater b,c a University of Manchester, UK b University of Surrey, UK c IZA, Bonn, Germany Received 6 April 2005; received in revised form 3 July 2006; accepted 12 July 2006 Available online 8 December 2006 Abstract Controlling for other variables, including neighbourhood ethnic composition, minorities in England and Wales with a preference for ethnic residential segregation have significantly worse employment rates — between 8 and 20 percentage points lower — than those who prefer more integrated areas. © 2006 Elsevier B.V. All rights reserved. Keywords: Ethnic segregation; Enclaves; Employment; Minorities JEL classification: J23; J7 1. Introduction Individuals from non-white ethnic minorities comprise around 8% of the population of the United Kingdom and previous research suggests that they suffer considerable labour market disadvantage relative to the white majority community. For example, Blackaby et al. (1998) reported that male, non- white earnings were 11% lower than those of whites while employment rates were around 10 percentage points lower. Explanations for this pattern of persistent disadvantage have focussed on differences in stocks of human capital between different ethnic groups and on employer discrimination. However, it has increasingly been recognised that, in many developed countries, minorities tend to live in geographical Economics Letters 94 (2007) 278 – 283 www.elsevier.com/locate/econbase ⁎ Corresponding author. School of Social Sciences, University of Manchester, Oxford Rd, Manchester, M13 9PL, UK. Tel.: +44 161 275 3679; fax: +44 161 275 4812. E-mail address: ken.clark@manchester.ac.uk (K. Clark). 0165-1765/$ - see front matter © 2006 Elsevier B.V. All rights reserved. doi:10.1016/j.econlet.2006.07.001