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Integration of Immigrants in OECD Countries: Do Policies Matter?

  • Orsetta Causa
  • Sébastien Jean

This working paper assesses the ease of immigrants' integration in OECD labour markets by estimating how an immigration background influences the probability of being active or employed and the expected hourly earnings, for given individual characteristics. Applying the same methodology to comparable data across twelve OECD countries, immigrants are shown to significantly lag behind natives in terms of employment and/or wages. The differences narrow as years since settlement elapse, especially as regards wages, reflecting progressive assimilation. Strong differences in immigrant-to-native gaps are also observed across countries, and the paper shows that they may, to a significant extent, be explained by differences in labour market policies, in particular unemployment benefits, the tax wedge and the minimum wage. In addition, immigrants are shown to be overrepresented among outsiders in the labour market and, as such, highly sensitive to the difference in employment protection legislation between temporary and permanent contracts. L'intégration des immigrés dans les pays de l'OCDE : Les politiques sur le marché du travail comptent-elles ? Ce document de travail évalue la qualité de l’intégration des immigrés sur les marchés du travail des pays de l’OCDE en estimant de quelle façon le statut d’immigré influe sur la probabilité d’être actif ou employé et sur l’espérance de salaire, pour des caractéristiques individuelles données. En appliquant la même méthodologie à des données comparables pour douze pays de l’OCDE, les salaires et de probabilité d’emploi des immigrés s’avèrent significativement en deçà de ceux des autochtones partageant les mêmes caractéristiques. Ces différences s’amenuisent au fur et à mesure des années écoulées depuis l’installation, en particulier concernant les salaires, reflétant un processus d’assimilation progressive. De fortes différences entre immigrés et autochtones sont également observées entre pays et ce travail montre qu’elles peuvent dans une large mesure être expliquées par les différences de politiques sur le marché du travail, en particulier en termes d’allocations chômage, de coin fiscal et de salaire minimum. Les immigrés sont en outre surreprésentés parmi les outsiders sur le marché du travail et sont de ce fait plus sensibles aux différences de législation de protection de l’emploi entre contrats temporaires et permanents.

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File URL: http://dx.doi.org/10.1787/162367775052
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Paper provided by OECD Publishing in its series OECD Economics Department Working Papers with number 564.

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Date of creation: 04 Jul 2007
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Handle: RePEc:oec:ecoaaa:564-en
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