Dynamics of Employment- and Earnings-Assimilation of First-Generation Immigrant Men in Sweden, 1990-2000

Alpaslan Akay ()

No 279, Working Papers in Economics from University of Gothenburg, Department of Economics

Abstract: The employment- and earnings-assimilation of first-generation immigrant men in Sweden was estimated using a dynamic random-e¤ects sample-selection model with eleven waves of unbalanced panel-data during 1990-2000. Endogenous initial values were controlled for using the simple Wooldridge method. Local market unemployment-rates were used as a proxy in order to control for the effect of changing macroeconomic conditions. Significant structural (true) state-dependence was found both on the employment-probabilities and on the earnings of both immigrants and native Swedes. The size of structural state-dependence differed between immigrants and Swedes. Failure to control for the structural state-dependence could have caused bias not only in the assimilation measures but also in the cohort-effects. For example, standard (classic) assimilation model seriously overestimates short-run marginal assimilation-rates and underestimates long-run marginal assimilation- rates. The model controlling for structural state-dependence shows that the earnings of all immigrants in Sweden (except Iraqies) eventually converge to those of native Swedes, but only Nordics and Westerners are able to reach the employment- probability of native Swedes.

Keywords: Dynamic random-e¤ects sample-selection model; employment and earnings assimilation; initial values problem; wage-curve method (search for similar items in EconPapers)
JEL-codes: C33 J15 J61 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2007-12-05
New Economics Papers: this item is included in nep-lab and nep-mig
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Citations: View citations in EconPapers (1)

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