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Employment Assimilation of Immigrants - Evidence from Finland

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  • Kari Hämäläinen

    ()

  • Aki Kangasharju

    ()

  • Sari Pekkala

    ()

  • Matti Sarvimäki

    ()

Abstract

This paper analyses economic effects of immigrants that moved to Finland be-tween 1990 and 2000. The focus is on labour market participation, which affects direct taxes paid and income transfers received by immigrants. Immigrants are followed from the year of immigration up to 2000 or out-migration. Countries of origin are grouped into four categories: OECD, neighbouring countries (Russia and Estonia), the “JIIS-countries” (i.e. former Yugoslavia, Iran, Irak and Soma-lia), and remaining other countries. The main result is that employment of immi-grants strongly increases over the years stayed in Finland. Consequently, non-humanitarian immigrants pay more direct taxes than they receive in income transfers after six years of immigration. When humanitarian immigration is in-cluded, the balance remains negative throughout the period of investigation. The analysis is based on immigrants staying in Finland for at least one year following immigration. Immigrants’ use of public services and consumption are excluded from the analysis, due to data availability.

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Bibliographic Info

Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa05p75.

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Date of creation: Aug 2005
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Handle: RePEc:wiw:wiwrsa:ersa05p75

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  1. Edin, P.-A. & Lalonde, R.J. & Aslund, O., 2000. "Emigration of Immigrants and Measures of Immigrant Assimilation: Evidence from Sweden," Papers 2000:13, Uppsala - Working Paper Series.
  2. Butler, J S & Moffitt, Robert, 1982. "A Computationally Efficient Quadrature Procedure for the One-Factor Multinomial Probit Model," Econometrica, Econometric Society, vol. 50(3), pages 761-64, May.
  3. Mundlak, Yair, 1978. "On the Pooling of Time Series and Cross Section Data," Econometrica, Econometric Society, vol. 46(1), pages 69-85, January.
  4. Hsiao, C., 1992. "Logit and Probit Models," Papers 9210, Southern California - Department of Economics.
  5. Jorgen Hansen & Magnus Lofstrom, 2003. "Immigrant Assimilation and Welfare Participation Do Immigrants Assimilate Into or Out of Welfare?," Journal of Human Resources, University of Wisconsin Press, vol. 38(1).
  6. Wiji Arulampalam & Alison L. Booth, 2000. "Union status of young men in Britain: a decade of change," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 15(3), pages 289-310.
  7. Robert J. LaLonde & Robert H. Topel, 1990. "The Assimilation of Immigrants in the U.S. Labor Markets," NBER Working Papers 3573, National Bureau of Economic Research, Inc.
  8. Bell, Brian D, 1997. "The Performance of Immigrants in the United Kingdom: Evidence from the GHS," Economic Journal, Royal Economic Society, vol. 107(441), pages 333-44, March.
  9. Chamberlain, Gary, 1984. "Panel data," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 2, chapter 22, pages 1247-1318 Elsevier.
  10. George J. Borjas, 1994. "The Economics of Immigration," Journal of Economic Literature, American Economic Association, vol. 32(4), pages 1667-1717, December.
  11. Chiswick, Barry R, 1978. "The Effect of Americanization on the Earnings of Foreign-born Men," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 897-921, October.
  12. Bellemare, C., 2003. "Economic Assimilation and Outmigration of Immigrants in West-Germany," Discussion Paper 2003-65, Tilburg University, Center for Economic Research.
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