Ethnic Diversity in Compulsory Schooling and Occupational Choices: Can Diversity Increase the Supply in Care-Oriented Occupations

Abstract

We investigate the effect of ethnic diversity on occupational choices, particularly in care-oriented occupations which are scarce in many high-income countries. We use administrative data of all students in Switzerland to study two diversity dimensions: ethnic fractionalization and ethnic polarization. We exploit variation across school cohorts to identify causal effects. We find opposing effects: ethnic fractionalization increases care-oriented occupations, while ethnic polarization reduces them. One mechanism could be that ethnic fractionalization enhances social skills and thereby the benefits of choosing care-oriented occupations. Thus, not only is the share of nonnative peers in schools important, but also the overall ethnic composition.