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Integration of Immigrants in OECD Countries: Do Policies Matter?

Author

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  • Orsetta Causa
  • Sébastien Jean

Abstract

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.

Suggested Citation

  • Orsetta Causa & Sébastien Jean, 2007. "Integration of Immigrants in OECD Countries: Do Policies Matter?," OECD Economics Department Working Papers 564, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:564-en
    DOI: 10.1787/162367775052
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    Citations

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    Cited by:

    1. Pia M. Orrenius & Madeline Zavodny, 2008. "The Effect of Minimum Wages on Immigrants' Employment and Earnings," ILR Review, Cornell University, ILR School, vol. 61(4), pages 544-563, July.
    2. Ivana Fellini & Raffaele Guetto, 2019. "Legal Status and Immigrants’ Labour Market Outcomes: Comparative Evidence from a Quasi-Experiment in Western and Southern Europe," Econometrics Working Papers Archive 2019_11, Universita' degli Studi di Firenze, Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti".
    3. Peter Hoeller & Isabelle Joumard & Isabell Koske, 2014. "Reducing Income Inequality While Boosting Economic Growth: Can It Be Done? Evidence From Oecd Countries," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 59(01), pages 1-22.
    4. Lee, Tae Hoon & Peri, Giovanni & Viarengo, Martina, 2020. "The Gender Aspect of Immigrants' Assimilation in Europe," IZA Discussion Papers 13922, Institute of Labor Economics (IZA).
    5. Guillaume Blache, 2011. "Active Labour Market Policies in Denmark : A Comparative Analysis of Post-Program Effects," Post-Print halshs-00654181, HAL.
    6. Abdurrahman Aydemir, 2013. "Skill-based immigrant selection and labor market outcomes by visa category," Chapters, in: Amelie F. Constant & Klaus F. Zimmermann (ed.), International Handbook on the Economics of Migration, chapter 23, pages 432-452, Edward Elgar Publishing.
    7. Steinar Holden & Åsa Rosén, 2014. "Discrimination And Employment Protection," Journal of the European Economic Association, European Economic Association, vol. 12(6), pages 1676-1699, December.
    8. Kingston, Gillian & O'Connell, Philip J. & Kelly, Elish, 2013. "Ethnicity and Nationality in the Irish Labour Market: Evidence from the QNHS Equality Module," Research Series, Economic and Social Research Institute (ESRI), number BKMNEXT230.
    9. Guillaume Blache, 2011. "Active labour market policies in Denmark: A comparative analysis of post-program effects," Documents de travail du Centre d'Economie de la Sorbonne 11071, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    10. Samuel Vézina & Alain Bélanger, 2019. "Impacts of education and immigration on the size and skills of the future workforce," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 41(12), pages 331-366.
    11. Per Skedinger, 2010. "Employment Protection Legislation," Books, Edward Elgar Publishing, number 13686.
    12. Guillaume Blache, 2011. "Active Labour Market Policies in Denmark : A Comparative Analysis of Post-Program Effects," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00654181, HAL.
    13. Isabell Koske & Jean-Marc Fournier & Isabelle Wanner, 2012. "Less Income Inequality and More Growth – Are They Compatible? Part 2. The Distribution of Labour Income," OECD Economics Department Working Papers 925, OECD Publishing.
    14. Raffaele Guetto, 2018. "Employment Returns to Tertiary Education for Immigrants in Western Europe: Cross-Country Differences Before and After the Economic Crisis," Social Inclusion, Cogitatio Press, vol. 6(3), pages 64-77.
    15. Jesús Ruiz-Huerta Carbonell & Rosa María Martínez López, 2014. "Multidimensional poverty in immigrant households: a comparative analysis within the Europe 2020 framework," CIRANO Working Papers 2014s-18, CIRANO.

    More about this item

    Keywords

    emploi; employment; immigration; immigration; integration; intégration; labour market policies; politique du marché du travail; salaires; wages;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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