The labour market integration of immigrants in Denmark. - Deutscher Bildungsserver

Liebig, Thomas

The labour market integration of immigrants in Denmark.

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"1. The labour market integration of immigrants has been a key issue both in the public debate and on the government agenda in Denmark, triggered by unfavourable employment outcomes of immigrants - the gaps in employment rates of immigrants compared to the native-born are among the highest in the OECD - and a rapid rise of the immigrant population during the past twenty years. Prior to the 1980s, immigration to Denmark was a very marginal phenomenon. Despite the rapid growth since then, with less than 7% immigrants in the population, Denmark still has one of the smallest immigrant populations in Western Europe. 2. Labour market outcomes for immigrants have been significantly below those of the native-born for more than two decades. This is partly attributable to the fact that immigration to Denmark has been strongly dominated by refugees and family reunification - groups whose labour market outcomes tend to be not as good as the native-born or economic migrants in all countries, particularly in the early years of settlement. Since 2001, lower social assistance has been introduced for all persons who have been in Denmark for less than seven out of the past eight years because of concerns about the impact of Denmark's relatively high social benefits on work incentives. In addition, participation in integration measures has been made obligatory. Finally, for more than a decade, there have been efforts to improve the labour market integration of immigrants, and these efforts have been enhanced recently... 4. The second generation is now gradually entering the labour market in larger numbers, and this group is of particular policy concern. Their educational attainment is well below that of comparable Danes without a migration background. This is mainly due to the fact that the dropout rates from vocational training for the second generation are more than twice as high as among persons of Danish origin. This, in turn, is at least in part attributable to the fact that persons with a migration background have more difficulties getting apprenticeship contracts with companies than comparable persons of Danish origin. There have been a series of recent measures to address this issue. However, even for those with upper secondary or tertiary education, employment rates of the second generation are significantly lower than for the native-born. This also holds for the offspring of immigrants from the OECD.... 7. There is some indication that current policies are having the desired effect, as labour market participation and employment of recent arrivals have increased. However, the unemployment rate for this group has also increased and it is getting lower social assistance. One way to escape from the resulting marginalisation is via self-employment, but few immigrants seem to succeed in pursuing this route. This may be linked with the fact that immigrants generally do not have access to loans before they acquire permanent residence, and requirements for permanent residence have been tightened. There is thus a case for better loan access for this group. 9. In any event, the inadequate results for the second generation, whatever the geographic origin or qualifications of persons in this group, suggests that the benefit disincentive explanation often advanced for low immigrant employment rates is not an entirely satisfactory one. A mix of less developed personal networks, information asymmetries and discrimination seems to be part of the answer. These are generally difficult to disentangle as the former in practice have the effect of excluding equally skilled immigrants from certain jobs even where there is no ostensible discrimination. Nevertheless, testing results in the past have shown that immigrants and their children were, not infrequently, selectively ignored in the recruitment process, even when they had similar characteristics as native Danes. This phenomenon undoubtedly still exists. It needs to be more regularly monitored and publicised, and measures to diversify recruitment channels should be encouraged. 10. Given Denmark's relatively high entry wages, the relative lack of networks and the information asymmetries about immigrant skills and qualifications, which may be more important in the Danish context with its recent immigration experience, one would expect measures which help to overcome hiring reticence and enable employers to evaluate immigrant skills to be particularly effective. Indeed, empirical evidence shows that company-based training and wage subsidies to employers have a strongly positive effect on labour market integration. Yet, relatively few immigrants profit from such measures currently. It is thus recommended to increase the scale and scope of these tools. First steps in this direction have recently been taken. There are also a variety of innovative networking projects in place which seek to set off this immigrants' lack of access to networks, including a nationwide mentorship project, and these benefit from a strong involvement of the civic community." Die Untersuchung enthält quantitative Daten. Forschungsmethode: deskriptive Studie. (author's abstract, IAB-Doku).