What explains immigrant–native gaps in European labor markets: The role of institutions

Martin Kahanec,Martin Guzi,Lucia Mýtna Kureková

doi:10.1093/migration/mnab044

Abstract

AbstractThe understanding of how institutional and policy contexts affect immigrant integration is essential for any effort to foster a sustainable and effective migration and integration policy framework. Immigrant–native labor market gaps may arise not only due to differences in human capital or other socio-economic and demographic characteristics, but also due to differentiated impacts of institutions and policies on otherwise similar immigrants and natives. Different integration policy approaches are needed to close the gaps arising through these different mechanisms. This article exploits the variation across Europe to study the institutional and policy determinants of immigrant–native gaps in host labor markets. Using the EU Labor Force Survey as the primary source of data and a novel analytical approach, we study immigrant–native gaps in labor force participation, unemployment, low-skilled employment, and temporary employment and measure the contribution of institutional and policy contexts to the part of these gaps that cannot be explained by immigrant–native differences in characteristics. Our findings confirm that institutional and policy contexts play a significant role in immigrant integration and highlight the importance of tailoring policy approaches with regard to the causes of immigrant–native gaps.

Highlights

Immigrant-native labor market gaps can be viewed as an inevitable artifact of the imperfect adjustment of immigrants and natives in globalized labor markets, and as a challenge that may threaten cohesion in receiving societies
The unexplained gap reveals differences in the treatment or behavior of immigrants relative to natives, which we study as a function of institutional context variables
Conclusions immigrant integration opportunities and challenges are in many respects similar across countries, there may be a number of important differences linked to international variation in the areas of industrial relations, labor laws, education and training, employment and supply and demand conditions

Summary

Introduction

Immigrant-native labor market gaps can be viewed as an inevitable artifact of the imperfect adjustment of immigrants and natives in globalized labor markets, and as a challenge that may threaten cohesion in receiving societies. With 6.7% of the population in the European Union being foreign-born, it is an important task for scientists as well as policy makers to better understand the determinants of native-immigrant gaps in receiving labor markets. This topic has received much scholarly attention, starting with the seminal works by Chiswick (1978) and Borjas (1985), who looked at immigrant adjustment in the US. Several studies, including Zimmermann (2005), Kahanec and Zaiceva (2009), Kahanec, Zaiceva and Zimmermann (2011) focused on European labor markets, finding labor market gaps between immigrants and natives that vary across outcome variables, immigrant groups, receiving countries, and time. There is evidence that discriminatory attitudes towards immigrants pose barriers to their labor market integration (Becker, 2010; Constant, Kahanec and Zimmermann, 2009; Rooth, 2014)

Results

Discussion

Conclusion