The absent rewards of assimilation: how ethnic penalties persist in the Swiss labour market

Abstract

We analyse whether the origin of immigrants and/or their level of assimilation to the host country (birth and naturalisation) can explain labour market trajectories. Among the manifold domains in which individuals with a migration background may face disadvantages, we focus on labour market re-integration because it has been proven to be a key factor in fostering long-term social integration into the host country. Although empirical evidence for discriminatory practices by employers is generally difficult to provide with registry data, our design minimises potential alternative explanations. Our study benefits from a unique dataset combining registry and survey data, which were collected in the Swiss Canton of Vaud among all newly unemployed individuals between February and April 2012. The findings are based on real labour market behaviour and show that when controlling for encompassing information on human and social capital and other employability criteria, individuals whose provenance is from outside the European Union face periods of unemployment that are up to 50% (or 3 months) longer than those of Swiss natives. Surprisingly, observable assimilation proofs in the form of naturalisation or birth in the host country do not improve labour market re-integration. We explain this finding by employers’ discriminatory hiring behaviour.