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Dynamics of Employment- and Earnings-Assimilation of First-Generation Immigrant Men in Sweden, 1990-2000

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  • Akay, Alpaslan

    () (Department of Economics, School of Business, Economics and Law, Göteborg University)

Abstract

The employment- and earnings-assimilation of first-generation immigrant men in Sweden was estimated using a dynamic random-e¤ects sample-selection model with eleven waves of unbalanced panel-data during 1990-2000. Endogenous initial values were controlled for using the simple Wooldridge method. Local market unemployment-rates were used as a proxy in order to control for the effect of changing macroeconomic conditions. Significant structural (true) state-dependence was found both on the employment-probabilities and on the earnings of both immigrants and native Swedes. The size of structural state-dependence differed between immigrants and Swedes. Failure to control for the structural state-dependence could have caused bias not only in the assimilation measures but also in the cohort-effects. For example, standard (classic) assimilation model seriously overestimates short-run marginal assimilation-rates and underestimates long-run marginal assimilation- rates. The model controlling for structural state-dependence shows that the earnings of all immigrants in Sweden (except Iraqies) eventually converge to those of native Swedes, but only Nordics and Westerners are able to reach the employment- probability of native Swedes.

Suggested Citation

  • Akay, Alpaslan, 2007. "Dynamics of Employment- and Earnings-Assimilation of First-Generation Immigrant Men in Sweden, 1990-2000," Working Papers in Economics 279, University of Gothenburg, Department of Economics.
  • Handle: RePEc:hhs:gunwpe:0279
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    File URL: http://hdl.handle.net/2077/7622
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    References listed on IDEAS

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    Keywords

    Dynamic random-e¤ects sample-selection model; employment and earnings assimilation; initial values problem; wage-curve method;

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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