Scandinavian Working Papers in Economics
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No 126:
Unemployment risk among newly hired immigrants

Sven-Olov Daunfeldt and Elina Wennberg ()

Abstract: Unemployment among immigrants is one of the most pressing issues facing European policy makers. Most of the research on unemployment among immigrants has been directed towards those who are low-educated or long-term unemployed, while those who are closer to establishing themselves on the labor market have received surprisingly little attention. Our aim is to address this shortcoming by investigating differences in unemployment risk between newly hired immigrants and natives using register data from Statistics Sweden. We find that unemployed immigrants are more likely to re-enter unemployment than natives in the same position, even after controlling for a wide range of individual- and firm-level factors. The difference in unemployment risk between immigrants and natives is significantly reduced if immigrants are hired by a firm in the hospitality sector, a young or small firm, or a firm with at least one manager born in a nonwestern country. Therefore, it appears that systematic differences exist in the risk of reentering unemployment between immigrants and native workers and that these differences are related to the workplace and industry in which they are hired.

Keywords: labor market; diversity; integration; immigrant; unemployment; unemployment days; negative binomial model; (follow links to similar papers)

JEL-Codes: D22; D23; J15; J18; J63; J64; (follow links to similar papers)

34 pages, August 16, 2017

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