Migration from outside of the European Union - Labor market outcomes in the Swedish municipalities

Abstract

In the aftermath of recent years unusually large influx of immigrants to Sweden from outside of the European Union, the debate regarding the impact of immigration on the economy and the labor market has intensified. Some politicians and debaters raise concerns about the fiscal impacts of immigration, while others argue that immigration cause wage and employment drops for native workers. The goal of this study is to determine the impact of immigration from outside of the European Union on municipal wages and unemployment rate. The study has been conducted by regressing the percentage of immigrants from outside of the European Union on average yearly municipal income and municipal unemployment rate in order to evaluate the impact of migration from outside of the European Union on the two dependent variables. This study shows that immigration from outside of the European Union has a significant negative effect on average yearly municipal income and a non-instantaneous positive effect on the municipal unemployment rate for total, male and female population. A surprising negative effect on youth unemployment rate can also be observed.