Regional labour market effects of immigration on low-skilled workers: the case of Sweden 1990–2003

Abstract

PurposeThe purpose of this paper is to examine the effects of immigration on the labour market outcomes of low-educated natives (i.e. residents without a university diploma). Using the labour market competition theory, which argues that the labour market effects of natives depend on the skill set of immigrants, the paper addresses whether immigrants are complementary to or substitutes for native workers.Design/methodology/approachLongitudinal matched employer–employee data on Sweden are used to estimate how low-educated natives, in regions experiencing the greatest influx of refugees from the Balkan wars, responded to this supply shock with regard to real wages, employment and job mobility between 1990 and 2003.FindingsFirst, the analysis shows that low-educated native workers respond to the arrival of immigrants with an increase in real wages. Second, although employment prospects in general worsened for low-skilled workers in most regions, this is not attributable to the regions experiencing the largest supply shock. Third, there are indications that low-skilled natives in immigration-rich regions are more likely to change workplace, particularly in combination with moving upwards in the wage distribution.Originality/valueRather than seeing an emergence of the commonly perceived displacement mechanism when an economy is subject to a supply shock, the regional findings suggest that high inflows of immigrants tend to induce a mechanism that pulls native workers upwards in the wage distribution. This is important, as the proportion of immigrants is seldom evenly distributed within a nation.

Structural Racism in Sweden: Framing Attitudes towards Immigrants through the Diversity Barometer Study (2005–2022)

“…Despite several decades of government initiatives and policies to counter racial discrimination of people with an immigrant background-more specifically from the global south-in the labour market, using the discourse of diversity's positive impact on the national economy, immigrants and their children are still targets of racial discrimination in different sectors of Swedish society. The discrimination is manifest in many aspects of daily life, for example, in housing conditions (Andersson et al 2010;Andersson and Molina 2018;Mangrio and Zdravkovic 2018;Hansson et al 2020), salaries, employment and work-life conditions (de los Reyes 2006; Behtoui and Neergaard 2010;Adjei et al 2021;Fors et al 2021) and health care (Groglopo and Ahlberg 2006;Hamed et al 2022;Odzakovic et al 2023).…”