Explaining Cross-Country Differences in Labor Market Gaps between Immigrants and Natives in the OECD

Andreas Bergh

No 1036, Working Paper Series from Research Institute of Industrial Economics

Abstract: In most OECD-countries, immigrants have lower employment and higher unemployment than natives. This paper compares nine potential explanations of these gaps. Results are obtained for 21–28 countries using bivariate correlations, OLS-regressions and Bayesian model averaging over all 512 theoretically possible model specifications. Two robust patterns are found. The unemployment gap is bigger in countries where collective bargaining agreements cover a larger share of the labor market. The employment gap is bigger in countries with more generous social safety nets. Five variables have explanatory value in some specifications: Xenophobia, employment protection laws, social expenditure, asylum applications, and the share of immigrants in the population. The education of immigrants and migrant integration policies have no explanatory value. A trade-off seems to exist such that countries with smaller labor market gaps have higher income inequality.

Keywords: Labor market segregation; Immigration; Insider-outside hypothesis (search for similar items in EconPapers)
JEL-codes: E24 J51 J60 J71 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2014-08-12
New Economics Papers: this item is included in nep-eur, nep-lab, nep-ltv, nep-mac and nep-mig
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:1036

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