Essays on Immigrants' Economic Integration

Abstract

This thesis consists of five papers, related to each other in terms of study-sample, study-subject or methods used. The first paper is concerned with second-generation immigrants' educational attainments, using the Longitudinal Individual Data-set (LINDA), which gave us the possibility to examine changes over time, from ages 16-17 to 21-22 and to compare second-generation immigrants with a randomly-chosen matched control-group of native Swedes. Since Swedish youth are obligated to remain in school through grade 9, finishing at age 16, so the focus was on post-compulsory (upper-secondary) education before university. The data available allowed us to analyze the influence of parental-income on post-compulsory educational choices, and even to decompose the sources of the income (i.e., labour-income, asset-income, welfare-income, etc.). We were also able to include parental levels of education as possible determinants. Thus we could take into account the effects of parents as role-models, as postulated by socialization theory. We found differences in these effects, and thus in the educational outcomes, both between second-generation immigrants and native Swedes, and among groups of second-generation immigrants identified by geographic origin. Again based on LINDA, the second paper focuses on the early labour-market experiences of second-generation immigrants in Sweden from age 16-17 in 1991 to age 25-26 in 2000. The initial experiences of new entrants into the labour-market can seriously influence later developments in their lives. Using transition-data analysis in a competing-risks framework, four different types of transitions into the labour-market were analyzed: The first two from either compulsory or post-compulsory education to various competing states; the last two from non-employment to work after either compulsory or post-compulsory education. Again a control-group of native Swedes was used for comparison. Parental characteristics not only influenced second-generation immigrants' prospects for continuing their education but also their later labour-market success. For all youths, regardless of ethnic background, parental education, occupation and income were vital. Other inter-generational transmission-channels such as ethnic capital and "neighborhood characteristics" were also important. The study verifies that finding a job was difficult for second-generation immigrants, especially for those from Africa, Latin America, and the Middle East. The third paper focuses on the relationship between university education and employment during the first four years after graduation. The study-population from a survey conducted for Statistics Sweden (SCB) during the spring of 1999, consisted of individuals who graduated during 1994. The data allowed us to examine the graduates' demographic backgrounds, their educational fields and achievements, as well as their initial and second labour-market experiences, including their disposable incomes in 1998. There were differences between the sexes as well as between universities attended, regions of residence, and occupational orientations, with respect both to types of transition and earnings. Again using LINDA, the fourth and fifth papers focus on arrival-cohort effects on the earnings of an unbalanced panel of 60,000-70,000 first-generation immigrants during 1990-2000, analyzed separately for men and women since their labour-market determinants were expected to be different. The econometric model used handled potential sample-selection bias by estimating the employment-and earnings-equations simultaneously while allowing for random effects in both, which allowed us to distinguish both age and cohort-effects. In the fifth paper a possible endogeneity-problem when using the husband's-earnings as a control variable was also corrected for by predicting their earnings and using them as an instrument in women's employment-and earnings-equations. As in the first and second papers, a matched control-group of randomly-selected native Swedish men (in the fourth paper) and women (in the fifth), was used. In terms of both employment-probabilities and earnings, there were considerable differences in terms of the marginal effects of some variables for immigrants with different geographic groups, and our findings were pessimistic for some of them especially Africans and Middle Easterners.