Juho Härkönen (EUI)
23 February 2023 @ 14:00 - 15:15
- Past event
Hiring or firing? The dynamics of labor market inequality among children of immigrants
Abstract. A large body of research has studied ethnic inequalities in employment and unemployment rates. Almost all studies have focused on inequalities in hiring and hiring discrimination in particular and the consensus view is that barriers to employment entry are the main drivers of ethnic employment inequalities in Europe. Next to no studies have considered inequalities in losing one’s job and employment exit, although cross-sectional (un)employment rates are a function of both inflows and outflows into (un)employment. We contribute to the literature on ethnic labour market inequalities by examining differences in exiting and entering unemployment between ten groups of second-generation immigrants and natives in Sweden. We use correlated random-effects dynamic models on population register data to predict inflow and outflow rates into unemployment and use these predictions to derive steady state unemployment probabilities in each group. Using these predicted probabilities, we perform counterfactual analyses in which each second generation group is assumed to face the predicted unemployment inflow and outflow rates, respectively, of ancestral Swedes. We find that equalizing outflows from unemployment does not reduce unemployment inequality. Rather, the unemployment gap disappears when equalizing unemployment inflows. We discuss possible explanations for the findings and implications for research practice on ethnic penalties in the labour market.
Joint with Raffaele Grotti (University of Trento) and Siddartha Aradhya (Stockholm University)