Career trajectories and outcomes of forced migrants in Sweden. Self-employment, employment or persistent inactivity?

Abstract

The current surge in forced migration to Europe is probably the largest and most complex since the Second World War. As population ageing accelerates and fertility falls below replacement level, immigration may be seen as a key component of human capital to address labor and skill shortages. Receiving countries are, however, hesitant about the contribution that forced migrants can make to the local economy. Coupled with increasing pressure on welfare services, they are associated with increased job competition and crime. Underutilization of immigrants’ skills is, however, a waste of resources that countries can scarcely afford. Understanding the labor market integration process of forced migrants is thus critical to develop policies that unleash their full skills potential and ultimately foster local economic productivity. While prior studies have examined the employment and salary outcomes of these immigrants at a particular point in time post-migration, they have failed to capture the temporal dynamics and complexity of this process. Drawing on administrative data from Sweden, we examine the career pathways of forced migrants using sequence analysis from their arrival in 1991 through to 2013. Findings reveal a dual picture of long-term labor market integration with over one-third of refugees experiencing a successful labor market integration pathway, and an equally large share facing a less fruitful employment outcomes. Our findings suggest education provision is key to promote a more successful integration into the local labor market by reducing barriers of cultural proximity and increasing the occurrence of entrepreneurship activity.

Publication
Small Business Economics