IDEAS home Printed from https://ideas.repec.org/p/zbw/glodps/680.html

The Effects of the 2008 Labour-Migration Reform in Sweden: An Analysis of Income

Author

Listed:
  • Irastorza, Nahikari
  • Emilsson, Henrik

Abstract

In 2008, Sweden changed its labour-migration policy in order to facilitate more labour migration from countries outside the EU. The unique design of the new law meant abandoning most state ambitions to shape labour migration. Under the new regulation, there are no labour-market tests or any consideration of the level of human capital. Instead, policy-makers trusted employers to select workers. We adopt a difference-in-differences approach and apply a series of OLS regressions on register data to assess the effects of the policy change on non-EU labour migrants' labour-market outcomes, as measured by income. The effects of the policy change are substantial. Non-EU labour migration increased and its composition changed after the reform, resulting in a significant decrease in mean incomes. The regression analysis shows that, despite the favourable economic cycle during the post-reform period, moving to Sweden as a third-country labour migrant following the 2008 labour-migration reform had a negative effect on the migrants' annual income. However, this effect became marginal after controlling for occupational level. We conclude that changes in their occupational composition were the main drivers of the income drop for non-EU labour migrants. In sum, the new non-selective labour-migration policy lowered labour migrants' mean income by opening the door to unskilled labour.

Suggested Citation

  • Irastorza, Nahikari & Emilsson, Henrik, 2020. "The Effects of the 2008 Labour-Migration Reform in Sweden: An Analysis of Income," GLO Discussion Paper Series 680, Global Labor Organization (GLO).
    • Handle: RePEc:zbw:glodps:680
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/224907/1/GLO-DP-0680.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Matthieu Chemin & Nagham Sayour, 2016. "The effects of a change in the point system on immigration: evidence from the 2001 Quebec reform," Journal of Population Economics, Springer;European Society for Population Economics, vol. 29(4), pages 1217-1247, October.
    2. Richard Blundell & Monica Costa Dias, 2009. "Alternative Approaches to Evaluation in Empirical Microeconomics," Journal of Human Resources, University of Wisconsin Press, vol. 44(3).
    3. Jonathan Chaloff, 2014. "Evidence-based regulation of labour migration in OECD countries: setting quotas, selection criteria, and shortage lists," Migration Letters, Migration Letters, vol. 11(1), pages 11-22, January.
    4. Ulf Rinne, 2013. "The evaluation of immigration policies," Chapters, in: Amelie F. Constant & Klaus F. Zimmermann (ed.), International Handbook on the Economics of Migration, chapter 28, pages 530-552, Edward Elgar Publishing.
    5. Simone Bertoli & Hillel Rapoport, 2015. "Heaven's Swing Door: Endogenous Skills, Migration Networks, and the Effectiveness of Quality-Selective Immigration Policies," Scandinavian Journal of Economics, Wiley Blackwell, vol. 117(2), pages 565-591, April.
    6. Richard Bedford & Paul Spoonley, 2014. "Competing for Talent: Diffusion of An Innovation in New Zealand's Immigration Policy," International Migration Review, Wiley Blackwell, vol. 48(3), pages 891-911, September.
    7. Justin van de Ven & Sarah Voitchovsky, 2015. "Skilled migrants and labour market integration: how important is the selection process?," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-28, December.
    8. Tani, Massimiliano, 2017. "Skilled Migration Policy and the Labour Market Performance of Immigrants," IZA Discussion Papers 11241, Institute of Labor Economics (IZA).
    9. Jonathan Chaloff & Georges Lemaître, 2009. "Managing Highly-Skilled Labour Migration: A Comparative Analysis of Migration Policies and Challenges in OECD Countries," OECD Social, Employment and Migration Working Papers 79, OECD Publishing.
    10. Alan G. Green & David A. Green, 1995. "Canadian Immigration Policy: The Effectiveness of the Point System and Other Instruments," Canadian Journal of Economics, Canadian Economics Association, vol. 28(4b), pages 1006-1041, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Cörvers, Frank & Reinold, Julia & Chakkar, Saena & Bolzonella, Francesco & Ronda, Vera, 2021. "Literature review labour migration," ROA Technical Report 005, Maastricht University, Research Centre for Education and the Labour Market (ROA).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mariele Macaluso, 2022. "The influence of skill-based policies on the immigrant selection process," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 39(2), pages 595-621, July.
    2. Sari Pekkala Kerr & William Kerr & Çağlar Özden & Christopher Parsons, 2017. "High-Skilled Migration and Agglomeration," Annual Review of Economics, Annual Reviews, vol. 9(1), pages 201-234, September.
    3. Foliano, Francesca & Tonei, Valentina & Sevilla, Almudena, 2024. "Social restrictions, leisure and well-being," Labour Economics, Elsevier, vol. 87(C).
    4. Alexander Hijzen & Sébastien Jean & Thierry Mayer, 2011. "The effects at home of initiating production abroad: evidence from matched French firms," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 147(3), pages 457-483, September.
    5. Jan Fałkowski & Maciej Jakubowski & Paweł Strawiński, 2014. "Returns from income strategies in rural Poland," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 22(1), pages 139-178, January.
    6. Li, Linjie & Liu, Xiaming & Yuan, Dong & Yu, Miaojie, 2017. "Does outward FDI generate higher productivity for emerging economy MNEs? – Micro-level evidence from Chinese manufacturing firms," International Business Review, Elsevier, vol. 26(5), pages 839-854.
    7. Magda Iga & Kiełczewska Aneta & Brandt Nicola, 2020. "The effect of child benefit on female labor supply," IZA Journal of Labor Policy, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 10(1), pages 1-18, March.
    8. Michael Pfaffermayr & Michael Wild & Christian Bellak, 2005. "Effekte ausländischer Übernahmen," Wirtschaft und Gesellschaft - WuG, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik, vol. 31(1), pages 113-124.
    9. Altorjai, Szilvia, 2013. "Over-qualification of immigrants in the UK," ISER Working Paper Series 2013-11, Institute for Social and Economic Research.
    10. Cain Polidano & Justin van de Ven & Sarah Voitchovsky, 2017. "The Power of Self-Interest: Effects of Education and Training Entitlements in Later-Life," Melbourne Institute Working Paper Series wp2017n12, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    11. Marusca De Castris & Guido Pellegrini, 2015. "Neighborhood Effects On The Propensity Score Matching," Working Papers 0515, CREI Università degli Studi Roma Tre, revised 2015.
    12. Marco Caliendo & Stefan Tübbicke, 2020. "New evidence on long-term effects of start-up subsidies: matching estimates and their robustness," Empirical Economics, Springer, vol. 59(4), pages 1605-1631, October.
    13. Mardones, Cristian, 2021. "Ex-post evaluation and cost-benefit analysis of a heater replacement program implemented in southern Chile," Energy, Elsevier, vol. 227(C).
    14. Joseph A. Clougherty & Klaus Gugler & Lars Sørgard, 2012. "Cross-Border Mergers and Domestic Wages: Integrating Positive 'Spillover' Effects and Negative 'Bargaining' Effects," Department of Economics Working Papers wuwp136, Vienna University of Economics and Business, Department of Economics.
    15. Slottje, Daniel J. & Millimet, Daniel L. & Buchanan, Michael J., 2007. "Econometric analysis of copyrights," Journal of Econometrics, Elsevier, vol. 139(2), pages 303-317, August.
    16. Dalsgaard, Søren & Nielsen, Helena Skyt & Simonsen, Marianne, 2014. "Consequences of ADHD medication use for children's outcomes," Journal of Health Economics, Elsevier, vol. 37(C), pages 137-151.
    17. Christian Volpe Martincus & Jerónimo Carballo, 2010. "Is Export Promotion Effective in Developing Countries? Firm-Level Evidence on the Intensive and Extensive Margins of Exports," IDB Publications (Working Papers) 36763, Inter-American Development Bank.
    18. Gobillon, Laurent & Magnac, Thierry & Selod, Harris, 2012. "Do unemployed workers benefit from enterprise zones? The French experience," Journal of Public Economics, Elsevier, vol. 96(9-10), pages 881-892.
    19. Dorte Sindbjerg Martinsen & Gabriel Pons Rotger, 2017. "The fiscal impact of EU immigration on the tax-financed welfare state: Testing the ‘welfare burden’ thesis," European Union Politics, , vol. 18(4), pages 620-639, December.
    20. Patrick Bennett, 2021. "The Work-To-School Transition: Job Displacement and Skill Upgrading among Young High School Dropouts," CESifo Working Paper Series 9417, CESifo.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:glodps:680. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/glabode.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.