Heterogeneous unemployment dynamics of ancestral Swedes and second-generation immigrants

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This paper uses Swedish registry data for almost 450,000 people born in Sweden between 1977 and 1981 to compare the experience of unemployment over the working careers of second-generation immigrants (children born in Sweden with at least one foreign-born parent) and ancestral Swedes (individuals born in Sweden with two parents born in Sweden).

It finds that while the risk of persistent unemployment is similar for both groups, the consequences are more serious for those with Middle-Eastern and Turkish origins.

There were significant differences in the unemployment rate of origin groups. Among men, ancestral Swedes had an overall unemployment rate between 1996 and 2016 of 10.2 per cent, while those of Iranian origin had just 9.9 per cent and those of Yugoslavian and Bosnian origins had 13.1 per cent. Among women, ancestral Swedes had an unemployment rate of 12.6 per cent, while those of Iranian origin had a rate of 10.5 per cent and those of Turkish origin had a rate of 16.6 per cent.

Looking at how the experience of unemployment develops over individuals’ working careers, results indicate that the risks of unemployment persistence – the likelihood that if you are unemployed in one year you will also be unemployed in the next – are nearly equivalent between ancestral Swedes and the other immigrant-origin groups.

However, the probability of becoming unemployed was significantly lower for ancestral Swedes than for those with parents from other countries. Those from outside the Nordic countries and Western Europe were, particularly at risk. Relatedly, given their higher probability to experience unemployment, the consequences of unemployment persistence are far more pronounced for second-generation immigrants with Middle-Eastern and Turkish origins.

Stronger employment protection legislation and policies outlawing discrimination in hiring practices might be useful in improving the long-term prospects of second-generation migrants, the research finds.