Do Host Country Educations Even Out the Playing Field? Immigrant-Native Labor Market Gaps in Sweden

Abstract

ABSTRACT The importance of investing in host country-specific human capital such as host country language proficiency and host country education is often cited as a determining factor for the labor market success of immigrants. This suggests that entirely host country educations should even out the playing field providing equal labor market opportunities for natives and immigrants with similar (host country) educations. This study follows a cohort of students from Swedish compulsory school graduation in 1988 until 2002 in order to document differences in education, including grades and field of education, and subsequent labor market outcomes between immigrants and natives. Results indicate both initial differences in youth labor market status and long term differences in employment rates, most notably for those with Non-European backgrounds. Differences in level or field of host country education cannot explain persistent employment gaps. However, employment gaps are driven by differences among those with secondary school educations only. No employment or income gaps are found for the university educated.