This study examines the effects of working in ethnic economy on social integration of immigrants. The analysis is based on a recently completed survey of the Chinese ethnic economy in Toronto. Our findings show that working in ethnic economies hampers participation in the social activities of the wider society. Results also suggest that those who gave a favorable evaluation of their own group, those who are independent class and family class immigrants have a higher likelihood of participation in social activities in the wider society. However, if those immigrants participate in an ethnic economy, they have significantly less participation in social activities in the wider society. Although previous research has documented that employment in ethnic economy is an “alternative avenue” for immigrants to achieve economic advancement in a new country, our study suggests that the social cost is substantial.