Heterogeneous unemployment dynamics of ancestral Swedes and second-generation immigrants

Abstract

Many immigrant groups disproportionately experience unemployment and this disadvantage often extends to their Swedish-born children—the second generation. This paper contributes to this stream of research by studying unemployment dynamics of ancestral Swedes and second-generation immigrants in Sweden. In particular, we ask: To what extent does unemployment persist over individuals’ working careers, i.e. what is the ‘causal’ link between past and current unemployment? And are these dynamics different for ancestral Swedes and second generation immigrants in Sweden? We answer these questions using correlated dynamic random-effects logit models. This type of analysis is particularly well-suited for our scope because it allows us to study the persistence of unemployment as the ‘causal’ relationship between past and current unemployment experiences. We use Swedish register data to follow individuals over their early working career – most importantly since they leave education and enter the labor market. The results indicate that although the odds of remaining unemployed in time t if one was unemployed in t-1 are nearly equivalent across groups, the consequences of state dependence are far more pronounced for second generation immigrants with Middle-Eastern, Eastern European, and Southern European origins.