Immigrants’ economic performance across Europe – does immigration policy matter?

Immigrants’ economic performance across Europe – does immigration policy matter? Drawing on panel data from the European Community Household Panel (ECHP), the British Household Panel Survey (BHPS) and the German Socio-Economic Panel Study (SOEP), we compare the economic performance of immigrants to Great Britain, West Germany, Denmark, Luxembourg, Ireland, Italy, Spain and Austria to that of the respective indigenous population. The unit of analysis is the individual in the household context. This allows us to define immigrants’ state of integration into the host society at the family level taking into account issues such as immigrant/native intermarriage. Economic performance is measured in terms of the country-specific pre-government income position and change in the relative income position due to redistribution processes within the respective tax and social security systems. Our work is based on the premise that countries may be categorized – similarly to existing categorizations based on the type of welfare regime – according to the nature of their immigration policy. From an economic point of view, a successful and integrative immigration policy should result – at least when controlling for background characteristics such as education – in a non-significant differential between the economic performance of immigrants and that of the indigenous population. At first glance, our results indicate that this “ideal” is not attained in all of the countries analysed, particularly not in Germany and Denmark, where the economic performance of immigrants is much lower than that of the indigenous population. However, results from GLS random-effects models show that immigrants to these countries improve their economic situation rapidly with increasing duration of stay in the host country. This implies that these countries also do fairly well in fostering in the economic integration of immigrants. Our empirical results further reveal that the substantial cross-country differences in the immigrant/native-born performance differential persist even when controlling in detail for socioeconomic characteristics of the household and for indicators of the state of the immigrants’ integration, such as years since migration and immigrant/native intermarriage. This suggests that not only the conditions of entry to a country impact on immigrants’ economic performance, but also country-specific institutional aspects such as restrictions on access to the labour market and parts of the social security system that are related to citizenship or immigrant status. There still is a great deal of heterogeneity across EU member states in this respect. This should be taken into account when working towards the harmonization of national EU immigration policies. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Population Research and Policy Review Springer Journals

Immigrants’ economic performance across Europe – does immigration policy matter?

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Publisher
Kluwer Academic Publishers
Copyright
Copyright © 2005 by Springer
Subject
Geography; Demography; Economic Policy; Population Economics
ISSN
0167-5923
eISSN
1573-7829
D.O.I.
10.1007/s11113-004-1370-4
Publisher site
See Article on Publisher Site

Abstract

Drawing on panel data from the European Community Household Panel (ECHP), the British Household Panel Survey (BHPS) and the German Socio-Economic Panel Study (SOEP), we compare the economic performance of immigrants to Great Britain, West Germany, Denmark, Luxembourg, Ireland, Italy, Spain and Austria to that of the respective indigenous population. The unit of analysis is the individual in the household context. This allows us to define immigrants’ state of integration into the host society at the family level taking into account issues such as immigrant/native intermarriage. Economic performance is measured in terms of the country-specific pre-government income position and change in the relative income position due to redistribution processes within the respective tax and social security systems. Our work is based on the premise that countries may be categorized – similarly to existing categorizations based on the type of welfare regime – according to the nature of their immigration policy. From an economic point of view, a successful and integrative immigration policy should result – at least when controlling for background characteristics such as education – in a non-significant differential between the economic performance of immigrants and that of the indigenous population. At first glance, our results indicate that this “ideal” is not attained in all of the countries analysed, particularly not in Germany and Denmark, where the economic performance of immigrants is much lower than that of the indigenous population. However, results from GLS random-effects models show that immigrants to these countries improve their economic situation rapidly with increasing duration of stay in the host country. This implies that these countries also do fairly well in fostering in the economic integration of immigrants. Our empirical results further reveal that the substantial cross-country differences in the immigrant/native-born performance differential persist even when controlling in detail for socioeconomic characteristics of the household and for indicators of the state of the immigrants’ integration, such as years since migration and immigrant/native intermarriage. This suggests that not only the conditions of entry to a country impact on immigrants’ economic performance, but also country-specific institutional aspects such as restrictions on access to the labour market and parts of the social security system that are related to citizenship or immigrant status. There still is a great deal of heterogeneity across EU member states in this respect. This should be taken into account when working towards the harmonization of national EU immigration policies.

Journal

Population Research and Policy ReviewSpringer Journals

Published: Mar 6, 2004

References

  • The effect of immigrant admission criteria on immigrant labour–market characteristics
    Barrett, A.

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