Explaining the labor market gaps between immigrants and natives in the OECD

Research output: Contribution to journalArticle

Abstract

In most OECD-countries immigrants have lower employment and higher unemployment than natives. The gap in labor market outcomes is larger in countries with more immigrant friendly attitudes. This paper suggests that in countries where labor market institutions are less competitive, native workers face less direct wage competition from immigration. As a result, the general population is more immigrant-friendly and income inequality is dampened. On the other hand, employment among immigrants suffers, thwarting the potential economic benefits from immigration. Empirical analysis of 19–28 OECD countries using Bayesian model averaging to cope with the model selection problem, provide support for the relevance of labor market institutions against other plausible explanations of immigrant labor market outcomes. In particular, the unemployment gap is bigger in countries where collective bargaining agreements cover a larger share of the labor market.

Details

Authors
Organisations
Research areas and keywords

Subject classification (UKÄ) – MANDATORY

  • Economics

Keywords

  • labor market segregation, immigration, inequality
Original languageEnglish
Article number745
JournalMigration Letters
Volume14
Issue number2
StatePublished - 2017
Publication categoryResearch
Peer-reviewedYes