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Immigrants' and Natives' Unemployment-risk: Productivity Differentials or Discrimination?

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Author Info
Arai, Mahmood (FIEF and Department of Economics, Stockholm University)
Vilhelmsson, Roger (SOFI)

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Abstract

Studying the unemployment risk during 1992 to 1995 for a sample of employees in 1991, we find that immigrants from the non-European countries run a risk of unemployment that is twice the corresponding risk for the native workers. There exist substantial unemployment-risk differentials taking into account employees’ demographic and human capital characteristics, the wage-rate in 1991 and systematic sorting of workers across establishments associated with varying unemployment risks. Exaggerating beyond all reasonable limits, the ability differentials (measured in school grades and IQ-tests) between immigrants and natives fails to explain the differences between immigrants and natives in unemployment risks. Our simulations indicate that the observed unemployment-risk differentials between native and non-European workers correspond to ability differentials that are at least as large as the whole range of IQ-scores. Our conclusion is that discriminatory behavior and stereotype beliefs must be involved. Furthermore, we report results indicating that the existing income-gap between immigrants and natives in Sweden is almost entirely due to unequal employment opportunities.

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Publisher Info
Paper provided by Trade Union Institute for Economic Research in its series Working Paper Series with number 169.

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Length: 27 pages
Date of creation: 15 Aug 2001
Date of revision:
Publication status: Published in Industrial Relations, 2004, pages 690-99.
Handle: RePEc:hhs:fiefwp:0169

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Related research
Keywords: Immigration; Unemployment; Discrimination;

Find related papers by JEL classification:
J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities and Races; Non-labor Discrimination
J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers
J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search
J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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  1. Waisman, Gisela & Larsen, Birthe, 2008. "Do Attitudes Towards Immigrants Matter?," SULCIS Working Papers 2008:5, Stockholm University Linnaeus Center for Integration Studies - SULCIS. [Downloadable!]
  2. Hesselius, Patrik, 2003. "Does Sick Absence Increase the Risk of Unemployment?," Working Paper Series 2003:15, Uppsala University, Department of Economics. [Downloadable!]
  3. Lundborg, Per, 2005. "Wage Fairness, Growth and the Utilization of R&D Workers," Working Paper Series 206, Trade Union Institute for Economic Research. [Downloadable!]
  4. Lundborg, Per, 2005. "Wage Theories for the Swedish Labour Market," Working Paper Series 207, Trade Union Institute for Economic Research. [Downloadable!]
  5. Nekby, Lena, 2002. "Employment Convergence of Immigrants and Natives in Sweden," Research Papers in Economics 2002:9, Stockholm University, Department of Economics. [Downloadable!]
  6. Selén, Jan & Ståhlberg, Ann-Charlotte, 2004. "Wage and Compensation Inequality — How Different?," Working Paper Series 197, Trade Union Institute for Economic Research. [Downloadable!]
  7. Nekby, Lena, 2002. "How Long Does it Take to Integrate? Employment Convergence of Immigrants and Natives in Sweden," Working Paper Series 185, Trade Union Institute for Economic Research. [Downloadable!]
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