The Impact of Naturalisation on Labour Market Outcomes in Sweden

Anticipating the citizenship premium: before and after effects of immigrant naturalisation on employment

“…First, as is common in this field of literature (e.g. Bratsberg and Raaum 2011;Engdahl 2011Engdahl , 2014, one of the consequences of performing a fixed-effects regression is that individuals with no variation on the dependent variable drop out of the analysis. These omitted individuals introduce the risk of selection bias, as migrants who remain in the analysis are not necessarily representative of the population.…”

“…The established theoretical framework focusses on how citizenship acquisition facilitates access to the labour market, reduces administrative costs in the hiring process and functions as a positive signalling device, but these mechanisms fail to explain substantial empirical ambiguity. Indeed, an examination of the literature reveals that (a) the positive economic impact of citizenship is not observed for all migrant groups or (b) in all countries and (c) the extent to which naturalisation has an effect differs per migrant group and national context, and in some cases is even observed to be negative (Bratsberg and Raaum 2011;Engdahl 2011;Helgertz, Bevelander, and Tegunimataka 2014;Scott 2008). This ambiguous picture has so far been predominantly attributed to the methodological challenge of an analysis of the economic consequences of naturalisation.…”

The citizenship premium

“…For instance, longitudinal studies in North America or Germany reveal increased wage growth after naturalisation (Bratsberg et al, 2002;Steinhardt, 2012). By contrast, a similar study performed by Engdahl (2011) and Scott (2008) in Sweden suggests that the relationship between citizenship and socio-economic integration is largely due to self-selection. In other words, immigrants who perform well in the labour market in the first place may be the ones who are also more likely to naturalise, and might consequently be positively selected before the act of naturalisation.…”

“…More specifically, it could be argued that migrants who are better equipped to perform well in the labour market, regardless of their legal status, are also more likely to naturalise. Research by for instance Scott (2008) and Engdahl (2011) shows that the positive association between naturalisation and labour market outcomes is largely attributable to endogeneity in Sweden. However, analyses by Steinhardt (2012) contradict these findings for Germany, revealing a substantial wage growth for male immigrants after naturalisation, even when controlling for self-selection.…”

“…Engdahl, 2011;Scott, 2008;Steinhardt, 2012). For instance, longitudinal studies in North America or Germany reveal increased wage growth after naturalisation (Bratsberg et al, 2002;Steinhardt, 2012).…”