The Ethnic Employment and Income Gap in Sweden: Is Skill or Labor Market Discrimination the Explanation? (original) (raw)
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Centre for Research and Analysis of …, 2007
This is the first study to use an achievement test score to analyze whether the income gap between second-generation immigrants and natives is caused by a skill gap rather than ethnic discrimination. Since, in principle, every male Swedish citizen takes the test when turning 18, we are able to bring more evidence to bear on the matter by estimating the income gap for a very large sample of individuals who are of the same age and have the same years of schooling at the test date. Once the result of the Swedish Military Enlistment Test is controlled for, the income gap almost disappears for second generation immigrants with both parents born in Southern Europe or outside Europe. However, when using a regular set of control variables the income gap becomes overestimated. This difference in results is most likely explained by the fact that schooling is a bad measure of productive skills for these groups of second-generation immigrants. It indicates that they compensate for their lower probability of being employed by investing in (in relation to their skill level) more schooling than otherwise similar natives.
Income Gap between Natives and Second Generation Immigrants in Sweden: Is Skill the Explanation?
SSRN Electronic Journal, 2007
The Income Gap Between Natives and Second Generation Immigrants in Sweden: Is Skill the Explanation? * This is the first study to use an achievement test score to analyze whether the income gap between second-generation immigrants and natives is caused by a skill gap rather than ethnic discrimination. Since, in principle, every male Swedish citizen takes the test when turning 18, we are able to bring more evidence to bear on the matter by estimating the income gap for a very large sample of individuals who are of the same age and have the same years of schooling at the test date. Once the result of the Swedish Military Enlistment Test is controlled for, the income gap almost disappears for second generation immigrants with both parents born in Southern Europe or outside Europe. However, when using a regular set of control variables the income gap becomes overestimated. This difference in results is most likely explained by the fact that schooling is a bad measure of productive skills for these groups of second-generation immigrants. It indicates that they compensate for their lower probability of being employed by investing in (in relation to their skill level) more schooling than otherwise similar natives.
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Studies of first generation immigrants often show that labour market outcomes differ greatly between different immigrant groups compared to the native population. This issue is also of high importance as regards the children of immigrants, born in the immigrant country. Previous studies have not been able to analyse the labour market outcomes for second-generation immigrants in the way done in this study. We are able to (i) identify several groups of secondgeneration immigrants with different ethnic backgrounds and (ii) identify the parent composition, i.e. whether one or both parents of the individual are foreign born. The results show that the labour market outcomes differ greatly between different groups of second generation immigrants compared to native-born Swedes. The pattern is similar to that in the parent generation. The outcome is more favourable if one parent is born in Sweden compared to having both parents foreign born. There is also a tendency that the outcome is more favourable if the mother is native born than if the father is.
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Despite having a celebrated labor market integration policy, the immigrant-native employment gap in Sweden is one of the largest in the OECD. From a crosscountry perspective, a key explanation might be migrant admission group composition. In this study we use high-quality detailed Swedish register data to estimate male employment gaps between non-EU/EES labour, family reunification and humanitarian migrants and natives. Moreover, we test if differences in human capital are able to explain rising employment integration heterogeneity. Our results indicate that employment integration is highly correlated with admission category. Interestingly, differences in human capital, demographic and contextual factors seem to explain only a small share of this correlation. Evidence from auxiliary regressions suggests that low transferability of human capital among humanitarian and family migrants might be part of the story. The article highlights the need to understand and account for migrant admission categories when studying employment integration.
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Ethnic origin, local labour markets and self-employment in Sweden: A Multilevel Approach
2011
We investigate the importance of ethnic origin and local labour markets conditions for selfemployment propensities in Sweden. In line with previous research we find differences in the self-employment rate between different immigrant groups as well as between different immigrant cohorts. We use a multilevel regression approach in order to quantify the role of ethnic background, point of time for immigration and local market conditions in order to further understand differences in self-employment rates between different ethnic groups. We arrive at the following: The self-employment decision is to a major extent guided by factors unobservable in register data. Such factors might be i.e. individual entrepreneurial ability and access to financial capital. The individual's ethnic background and point of time for immigration play a smaller role for the self-employment decision but are more important than local labour market conditions.