19 June 2018

Immigrant labour market integration

Integration between economies and labour markets across the globe has increased, and especially within the European Union (EU). As a result, labour market integration is one of the major challenges facing Western European states today, not least because of the increasing migration flows coming from Central and Eastern Europe (CEE) and countries outside the EU. In his Ph.D. dissertation 'Labour Market Integration – On the multiple dimensions of immigrant labour market integration’ Jonas Felbo-Kolding has analysed the labour market integration of CEE immigrants in Denmark

On the positive side, labour immigrants may alleviate employers’ labour demands, thereby positively contributing to the state budget through the taxation of firm profits and individual workers’ labour market income. On the negative side, if immigrants fail to integrate successfully into the receiving labour markets, it undermines the fiscal basis of the state and challenges the broader social integration and welfare of individual immigrants and their offspring.

The overall findings of the dissertation are fourfold. First, there exists a division of labour among groups of intra-EU immigrants across the Danish, German and British labour markets, where CEE immigrants have higher employment rates than other intra-EU immigrant groups, but primarily find low-paid, low-skilled employment.

Second, a considerable earnings gap exists between native workers and post-enlargement CEE immigrants even after more than seven years of settlement and that at the overall aggregate level, and the earnings gap is primarily explained by differences in hourly wages and only to a lesser extent by differences in working hours.

Third, in an earnings gap decomposition the extent to which differences in hourly wages explain the gap varies greatly across the earnings distribution. Whereas the earnings gap between long-term CEE immigrants and natives at the top is almost entirely explained by differences in hourly wages, moving down the distribution, the effect of differences in working hours and employment stability increases.

Finally, focusing on unionisation the dissertation finds that after five years of settlement, more than half of the long-term CEE immigrants in Denmark have unionised, and most of them within the first two years of arriving. The two main factors explaining long-term CEE immigrants’ propensity to unionise are social customs at the workplace and the unionisation status of their partners.

Read the dissertation: 'Labour Market Integration – On the multiple dimensions of immigrant labour market integration’  by Jonas Felbo-Kolding.