[4] As immigrants tend to cluster in close geographic spaces, they develop migrant networks—systems of interpersonal relations through which participants can exchange valuable resources and knowledge.

Historically, the formation of ethnic enclaves has been the result of a variety of socioeconomic factors that draw immigrants to similar spaces in the receiving city, state, or country.

The lack of access to economic capital and of knowledge regarding residential neighborhoods can constrain newly arrived immigrants to regions of affordable housing.

Instead of entering the secondary labor market of the host society, Portes and Wilson discovered that new immigrants tended to become employed by co-ethnics running immigrant-owned firms.

[5] With the rise in globalization and ease of international transportation, patterns of immigration show the role of ethnic enclaves for contributing to increased migration over time.

According to Douglas Massey, "Networks build into the migration process a self-perpetuating momentum that leads to its growth over time, in spite of fluctuating wage differentials, recessions, and increasingly restrictive immigration policies.

"[4] Ethnic enclaves thus contribute to continued immigration by providing co-ethnics with a space to make connections that ultimately lower migration costs and promote economic mobility.

An approach that analyzes ethnic enclaves and their members by their modes of incorporation is preferred to a neoclassical model, which states that the economic success of immigrants depends on the education, work experience, and other elements of human capital that they possess.

Upon arrival to a foreign country, immigrants face challenges in assimilation and integration processes and thus experience different modes and levels of incorporation within the host society.

The segmented assimilation model notes that there can exist a "consciously pluralistic society in which a variety of subcultures and racial and ethnic identities coexist" [21][22] One influential factor in an immigrant's journey is the presence of relatives or friends in the receiving country.

If the receiving country provides favorable conditions such as access to social programs, the local economy, and employment opportunities, the network is likely to be of much higher quality.

[18] In addition to increasing the cultural comfort of the migrant, healthy ethnic enclaves offer solidarity and trust among members, and informal training systems within the workplace.

Immigrants may also receive informal training regarding the customs and practices of the larger culture outside the enclave and help navigating challenges in many areas of everyday life.

[18] Social hostility may be a challenge faced by immigrants in their host society, therefore to avoid this factor, ethnic enclaves provide a haven where economic success may still be achieved.

Goods and services tend to be offered in the ethnic group's language, while social and cultural norms specific to the host country are not required of employees in the enclave economy.

[3] Governments generally enforce measures to reduce the amount of "unwanted" immigrants which may potentially pose a burden on the receiving society and economy.

Governments with undefined or ambiguous stances toward immigration may propagate unintended consequences, and the reliance on flawed policies can further reduce the efficacy of institutional measures.

Bloemraad describes political incorporation as a "social process of mobilization by friends, family, community organizations and local leaders that is embedded in an institutional context shaped by government policies of diversity and newcomer settlement.

Bloemraad shows that friends, family, co-ethnic organizations and local community affect political incorporation by providing a structured mobilization framework.

Thus, the movement toward political incorporation and citizenship is nested in a larger institutional structure involving economic and social integration policy as these relate to immigrants.

The role these networks play remains uncertain due to the fact that ethnic enclaves allow immigrants to function successfully within the host society without a significant amount of adjustment either culturally or linguistically.

Enclave workers will share with those in the primary sector a significant economic return past human capital investments" something those who enter the secondary labor market are not able to enjoy.

Sanders and Nee also assert the idea that segregation and forced entrance of immigrant-workers into low paying jobs is actually aggravated by the existence of ethnic enclaves.

Due to these objections, they call for the revision of Portes and Wilson's hypothesis to include an acknowledgement and outline of the entrepreneur/worker economic benefit distinction.

They instead assert that this will usually not be the case as the constant entrance of new immigrants into the enclave will actually be somewhat burdensome on the economy; a factor which does not actually represent disadvantage when compared with the other advantages provided.

The first of these conditions requires the demonstration that ethnic entrepreneurship is a mobility trap leading to lower earnings than the immigrant's worth in human capital.

The retail market is a viable option due to the relatively low startup costs and knowledge of the host country's language required.

This model showcased how immigrants who arrived in the U.S. in the early 20th century were drawn to urban enclave neighborhoods as they opened up opportunities for social networking and employment.

[43] Most ethnic neighborhoods in the United States disappear within a decade or two, as immigrants gain language abilities, cultural skills, and resources and subsequently move elsewhere.

The enclave originated around 1543 when the Hungarian magnate Batthyany sought to repopulate lands that had been emptied by devastating Turkish attacks; he invited Croatian settlers.