Drivers of Immigrant Employment in Switzerland

Résumé 0

In modern societies, labour market participation is considered essential for immigrants to be regarded as "integrated". Moreover, paid work generally increases societal participation and reduces welfare dependency. Hence, it is in the interest of both, immigrants and the host country society, to ensure a high level of labour-market integration. This thesis argues that immigrants' labour market disadvantage can be explained by four different drivers. First, differences in existing human and social capital can determine labour market success relative to natives. Second, a host-country's society's attitudes towards immigrants can affect their labour market success. According to this concept of discrimination, (residual) differences in labour market outcomes are explained by differential behaviour of a majority population towards its in-group peers vis-à-vis the immigrant out-group. Third, integration policies can affect individual human capital endowment and consequently alter the skill composition of immigrants relative to natives. Fourth, policies can also affect how immigrants are enabled to applying their existing skills. That is, such immigration-policy effects do not change individual skill composition but affect how these skills can be used in the host-country labour market, for instance, through recognition of educational attainment. We are able to combine survey-based analyses and residual approaches with experimental research and show that discrimination continues to be a plausible explanation for differences in labour-market outcomes between natives and immigrants. Our research further demonstrates that enhancing immigrants' human capital can turn out to be a powerful tool to mitigate differences in labour market outcomes, even among the most vulnerable groups such as asylum seekers. In fact, we provide evidence that active labour market measures are more beneficial for immigrants than for natives. On the other hand, we have shown that the effects of integration and immigration policies currently in place in Switzerland are often detrimental for immigrants' skill acquisition as well as skill utilisation, thereby hampering immigrants' labour market integration instead of promoting it. For activation measures, for instance, we show that migrants are overrepresented in programmes with little efficacy. We infer that if political and societal goals do not prioritise immigrants' integration, self-reinforcing patterns of discrimination can easily occur. Contemporary policy-making should therefore focus on counteracting for statistical discrimination, in order to lay the groundwork for fighting taste-based discrimination, a challenge that goes beyond short-term labour-market policies.