Immigration, Housing Discrimination and Employment

We use a new data set on Italy and a novel identification strategy to analyse the relationship between migrants' employment status and the percentage of non-Italians living nearby. Our data contain information at the very local level and are representative of both legal and illegal migrants. Identification exploits the physical characteristics of local buildings as a source of exogenous variation in the incidence of migrants. We find that migrants residing in more immigrant-dense areas are less likely to be employed. This penalty is higher if the migrants leaving nearby are illegal and it is not mitigated if they are from own ethnic group or more proficient in Italian.