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The purpose of this paper is to describe the degree of ethnic residential segregation and diversification in Dutch neighbourhoods.

Using data on neighbourhood level, the authors calculate segregation and diversification indices, and illustrate the distribution of main origin groups by cumulative distribution functions. A preliminary analysis is conducted to quantify the relationship between neighbourhood ethnic composition and economic outcomes (income and welfare dependency).

No evidence is found on the existence of mono‐ethnic neighbourhoods in The Netherlands. The higher concentration of non‐Western immigrants in the large cities occurs in neighbourhoods with a high degree of diversity from several origins. An apparent strong correlation between the concentration of non‐Western immigrants and the prevalence of social benefits is likely due to the composition effect. The findings counter the public opinion that ghetto‐like neighbourhoods are dominant. They suggest that neighbourhood housing composition plays possibly an important role to attract immigrants with a weak socio‐economic position, who are often from a variety of non‐Western countries, rather than from a single origin.

Social policies aimed at improving neighbourhood quality affect non‐Western immigrants from different source countries simultaneously, as they tend to live together in immigrant neighbourhoods. But integration policies targeted at neighbourhoods are insufficient, as many immigrants live in areas with low immigrant density: policies targeted at individuals (and families) remain indispensable.

This is the first paper to document segregation and diversity in The Netherlands, using unique neighbourhood level data. Applying cumulative distribution functions to these issues is also novel.

The purpose of this paper is to examine interethnic differences in the degree of participation in social assistance, disability, and unemployment benefits during the working‐age period.

Using individual register data of the entire immigrant population for 2005 from Statistics Netherlands, the paper employs standard probit models to estimate differences in welfare use between immigrant groups that are divided into the first and second generations.

The analysis shows that migrants from non‐western countries, both first and second generation, have a higher probability of participation in social assistance and disability‐benefit programs and to a lesser extent in unemployment‐benefit programs. A large part of migrants’ welfare dependence can be explained by their background characteristics and immigration history, but a significant unexplained residual is still left. Strikingly, the degree of dependence of second‐generation non‐western migrants on social assistance is similar to their parents’.

A higher welfare dependency of non‐western immigrants is probably related to the admittance policy. Most immigrants from developing countries are allowed to enter The Netherlands on humanitarian grounds, as family or asylum migrants.

This study is the first scholarly investigation of welfare use by immigrants and their descendants in The Netherlands. An additional novel feature is that the study covers three major social‐welfare benefits for those aged between 19 and 64 years.