Immigrants' and Natives' Unemployment-risk: Productivity Differentials or Discrimination?

Mahmood Arai and Roger Vilhelmsson
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Roger Vilhelmsson: SOFI, Postal: Stockholm University, SE-106 91 Stockholm, Sweden

No 169, Working Paper Series from Trade Union Institute for Economic Research

Abstract: Studying the unemployment risk during 1992 to 1995 for a sample of employees in 1991, we find that immigrants from the non-European countries run a risk of unemployment that is twice the corresponding risk for the native workers. There exist substantial unemployment-risk differentials taking into account employees’ demographic and human capital characteristics, the wage-rate in 1991 and systematic sorting of workers across establishments associated with varying unemployment risks. Exaggerating beyond all reasonable limits, the ability differentials (measured in school grades and IQ-tests) between immigrants and natives fails to explain the differences between immigrants and natives in unemployment risks. Our simulations indicate that the observed unemployment-risk differentials between native and non-European workers correspond to ability differentials that are at least as large as the whole range of IQ-scores. Our conclusion is that discriminatory behavior and stereotype beliefs must be involved. Furthermore, we report results indicating that the existing income-gap between immigrants and natives in Sweden is almost entirely due to unequal employment opportunities.

Keywords: Immigration; Unemployment; Discrimination (search for similar items in EconPapers)
JEL-codes: J15 J61 J64 J71 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2001-08-15
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Citations: View citations in EconPapers (9)

Published in Industrial Relations, 2004, pages 690-99.

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Persistent link: https://EconPapers.repec.org/RePEc:hhs:fiefwp:0169

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