Cities: Catalysts or roadblocks in labor market desegregation?

Austria now has a higher share of foreign-born residents than traditional immigration countries like the US and Canada, with nearly 40% of immigrants living in Vienna. While large cities offer diverse opportunities, they may also foster ethnic segregation, particularly in social and professional networks. This study investigates workplace segregation in Austria from 2008 to 2022 using detailed administrative data. It examines how segregation by ethnicity and gender manifests across establishments and how it relates to professional networks among coworkers. The analysis explores whether these patterns vary by city size and how they influence employment and wages. A key focus is on workers displaced by firm closures, allowing for causal inference by comparing their actual career paths to those of similar non-displaced workers. This approach sheds light on how cities shape labor market outcomes and whether they mitigate or reinforce workplace segregation. The findings aim to deepen our understanding of urban dynamics in shaping integration and inequality.