Skip to main content

Advertisement

SpringerLink
Log in

Trajectories of Employment Gaps of Refugees and Other Migrants: Evidence from Austria

  • Original Research
  • Published:
Population Research and Policy Review Aims and scope Submit manuscript

Abstract

This paper analyzes the labor market integration of non-European refugees originating from middle- and low-income countries for the period of 2009–2018 in Austria. We assess their probability of being employed relative to Austrian natives and compare it with that of other non-European migrants and European refugees and other immigrants from low- and middle-income non-EU countries. We draw on a register-based panel dataset covering the complete labor market careers of all individuals residing in Austria. We control for macrolevel explanatory variables (e.g., the labor market situation at the time and the place of settlement) and individual characteristics. The analysis shows that initial refugee employment gaps relative to natives are large in the first years, when labor market access is difficult. After a period of 7 years, the unconditional gap between refugees and natives declines to 30 percentage points, similar to that of other migrants, but the gap is still decreasing. After controlling for a set of explanatory variables, the conditional gap amounts to only 10 percentage points at that time. Moreover, our analysis provides insights into differences in employment gaps across population subgroups of immigrant groups and natives by gender, age, education level, and types of employment.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1

Source Austrian Ministry of Interior, Eurostat, own calculations

Fig. 2

Source Statistics Austria, own calculations

Fig. 3

Source Statistics Austria, own calculations

Fig. 4

Source Statistics Austria, own calculations

Fig. 5

Source Statistics Austria, own calculations

Fig. 6

Source Statistics Austria, own calculations

Fig. 7

Source Statistics Austria, own calculations

Fig. 8

Source Statistics Austria, own calculations

Fig. 9

Source Statistics Austria, own calculations

Fig. 10

Source Statistics Austria, own calculations

Similar content being viewed by others

Notes

  1. A negative long-lasting outcome was reported by Marbach et al. (2018), who showed that an increase in the waiting period for refugees from Former Yugoslavia resulted in negative effects for this entry cohort regarding employment and job search intensity for up to 10 years after arrival in Germany. Conversely, Hvidtfeldt et al. (2018) found that labor market integration for Denmark is only postponed by the waiting period for asylum status.

  2. Over the period in question, most (about 60%) of the non-European refugees came from Syria, Afghanistan, Iraq, and Iran; however, our analysis also considers refugees coming from other non-European origin countries.

  3. During the asylum application, refugees receive public ‘basic care’ support, which covers the provision of housing and food, some pocket money and additional allowances, e.g., for clothes. When living in private accommodation, the maximum amount of benefits, including allowances for accommodation and food, can amount up to about EUR 400 per month (2018 figure) for a single refugee. Some or all of this benefit can be lost if the above-stated income threshold is exceeded.

  4. Register-based labor market career data comprise information for the period 01.01.2009 to 30.09.2018 on a daily basis.

  5. To reduce fluctuations in labor market status, some smoothing is applied: employment episodes with the same employer with interruptions of up to seven days are joined; and periods of inactivity of up to seven days are deleted and prolong the preceding activity status. For data privacy protection reasons, the statistical disclosure control method of ‘Target Record Swapping’ is used on a part of the data: non-equal variable values are exchanged between paired individuals that show equal values in other variables. Therefore, in particular for cell values ≤ 30, no reliable assertions can be made.

  6. For 2011–2014, data are available on a yearly basis for these variables; for 2015–2018, they are available on a quarterly basis.

  7. The panel data structure allows us to follow and analyze individuals over time. This allows us to obtain more precise results for labor market integration of immigrant groups than by using cross-sectional data.

  8. Even though we have a rich set of explanatory variables at hand, we—as is typical of non-survey data—lack information on some potentially relevant characteristics such as individuals’ language proficiency, health status, existing social/ethnic networks, and work experience before arriving in Austria.

  9. Our results indicate substantial differences in the labor market performance between refugees and other migrants that however converge over time. This also holds true for women (see Section ‘Population Subgroups’).

  10. Non-high-income countries are defined according to the World Bank as those with a per-capita (gross) annual income below USD 12,375 at purchasing power parities (2018 value).

  11. For the purpose of this study, we define Turkey as a non-European country, as nearly the entire country is part of Western Asia in geographic terms and it is this part of the country that accounts for most migrants.

  12. We undertook some checks to test whether the random draws give reliable results. Specifically, we compared the results of a cross-section regression, once with the entire population and once with the random draws. The estimated coefficients predominantly coincided.

  13. The largest number of immigrants leave the country in the first 2 years after arrival.

  14. Specifically, in the period 2015–2017 many asylum applications from Western Balkan countries were rejected and hence a high number of these applicants returned to their countries.

  15. In order to test the effect of sample bias due to attrition, we conducted the regression analysis only for those individuals of the immigrant groups who remained in Austria from arrival until the last period of analysis (third quarter of 2018). Thus, we excluded any immigrant who moved abroad over the period 2009–2018 or disappeared from the register for other reasons. We observed marginal changes in the levels of employment gaps, but the patterns over time were found to be very similar. We also did this robustness test for our population subgroup specifications (see Section ‘Population Subgroups’). The pattern of employment gaps followed those found in our baseline results. Results are available upon request.

  16. We also use higher thresholds of days in order to test the robustness of our results (30 and 60 days). Even though we find differences in the extent of the employment gaps, the pattern over time across immigrant groups remains relatively stable. Results are available upon request.

  17. In the unconditional estimations, we apply only year and quarter fixed effects.

  18. We also estimate Specification (1) by different age cohort (the full set of regression results are listed in Table 6 in the Appendix). The results suggest that this finding is mainly driven by the fact that younger individuals are still in education. For older age cohorts, we find a higher employment probability for individuals with medium–high compared with low and medium–low educational attainment.

  19. We also re-ran Specification (1) by population subgroup including gender (see Section ‘Population Subgroups’). The impact of the age of the youngest child was found to be very different for women and men: while women with children up to the age of 10 years have lower employment intensity, those with older children are more likely to be in work than women without children. Men, however, show higher work intensity also with younger children.

  20. We consider here only training financed by the public employment service in the analyzed period 2011–2018.

  21. Please note that employment probabilities for other migrants are likely to be somewhat biased downwards, as this immigrant group also includes individuals who migrated to Austria for family reunion and tend to have similar characteristics than refugees. A more detailed discussion can be found in the section ‘Data and Sample Construction.’

  22. We also estimate the specifications by group using individual fixed effects. The estimates predominantly show statistically significant positive effects. This again suggests that the results for the time spent in education and training are very likely biased due to selection (see the discussion regarding the overall effects above).

  23. In addition, however, the Austrian public employment service was able to collect data on attainment levels from more recent refugees they were in contact with, particularly from non-European destinations.

  24. Among individuals with no educational attainment information, men seem to be more prominently represented than females as compared to the group for which information was available.

  25. Please note again that the largest number of immigrants leave the country in the first 2 years after the arrival.

  26. For a discussion on problems regarding labor market integration of highly educated immigrants, see Section ‘Differences in effects of covariates across immigrant groups.’

  27. Marginal employment indicates jobs with an income below EUR 438.05 per month (2018 figure).

  28. We find similar patterns of employment gaps for full-time employees over time when we use higher thresholds of days for the definition of the dependent variable (instead of 10 days, we use 30 and 60 days).

References

  • Adsera, A., & Chiswick, B. R. (2007). Are there gender and country of origin differences in immigrant labor market outcomes across European destinations? Journal of Population Economics, 20(3), 495–526.

    Article  Google Scholar 

  • Arendt, J. N. (2020). Labor market effects of a work-first policy for refugees. Journal of Population Economics. https://doi.org/10.1007/s00148-020-00808-z

    Article  Google Scholar 

  • Arendt, J. N., Bolvig, I., Foged, M., Hasager, L., & Peri, G. (2020). Integrating refugees: Language training or work-first incentives?, Working Paper 26834, National Bureau of Economic Research.

  • Azlor, L., Damm, A. P., & Schultz-Nielsen, M. L. (2020). Local labour demand and immigrant employment. Labour Economics, 63, 101808.

    Article  Google Scholar 

  • Bakker, L., Dagevos, J., & Engbersen, G. (2014). The importance of resources and security in the socio-economic integration of refugees A Study on the Impact of Length of Stay in Asylum Accommodation and Residence Status on Socio-Economic Integration for the Four Largest Refugee Groups in the Netherlands. Journal of International Migration and Integration, 15, 431–448.

    Article  Google Scholar 

  • Bakker, L., Dagevos, J., & Engbersen, G. (2017). Explaining the refugee gap: A longitudinal study on labour market participation of refugees in the Netherlands. Journal of Ethnic and Migration Studies, 43, 1775–1791.

    Article  Google Scholar 

  • Basilio, L., Bauer, T. K., & Kramer, A. (2017). Transferability of human capital and immigrant assimilation: An analysis for Germany. Labour, 31(3), 255–264.

    Article  Google Scholar 

  • Biffl, G., Deutsch, E., Lutz, H., & Marterbauer, M. (1997). ‘Ökonomische und strukturelle Aspekte der Ausländerbeschäftigung in Österreich‘. Österreichisches Institut für Wirtschaftsforschung.

    Google Scholar 

  • Borjas, G. (1985). Assimilation, changes in cohort quality, and the earnings of immigrants. Journal of Labor Economics, 3(4), 463–489.

    Article  Google Scholar 

  • Borjas, G. J. (1987). Self-selection and the earnings of immigrants. The American Economic Review, 77(4), 531–553.

    Google Scholar 

  • Bratsberg, B., Raaum, O., & Røed, K. (2014). Immigrants, labour market performance and social insurance. The Economic Journal, 124(580), 644–683.

    Article  Google Scholar 

  • Bratsberg, B., Raaum, O., & Røed, K. (2017). Immigrant labor market integration across admission classes. Nordic Economic Policy Review: Labour Market Integration in the Nordic Countries, pp. 17–54.

  • Brell, C., Dustmann, C., & Preston, I. (2020). The labor market integration of refugee migrants in high-income countries. The Journal of Economic Perspectives, 34(1), 94–121.

    Article  Google Scholar 

  • Chiswick, B. R. (1978). The effect of Americanization on the earnings of foreign-born men. Journal of Political Economy, 86(5), 897–921.

    Article  Google Scholar 

  • Chiswick, B. R., & Miller, P. W. (2002). Immigrant earnings: Language skills, linguistic concentration and the business cycle. Journal of Population Economics, 15(1), 31–57.

    Article  Google Scholar 

  • Constant, A. F, & Zimmermann, K. F. (2005). Legal status at entry, economic performance, and self-employment proclivity: A bi-national study of immigrants. IZA Discussion Paper, 1910.

  • Corluy, V., & Verbist, G. (2014). Can education bridge the gap? Education and the employment position of immigrants in Belgium, ImPRovE Discussion Paper No. 14/02, Antwerp.

  • Damm, A. P. (2009). Ethnic enclaves and immigrant labor market outcomes: Quasi-experimental evidence. Journal of Labor Economics, 27(2), 281–314.

    Article  Google Scholar 

  • Dustmann, C., Fasani, F., Frattini, T., Minale, L., & Schönberg, U. (2017). On the economics and politics of refugee migration. Economic Policy, 32(91), 497–550.

    Article  Google Scholar 

  • Duvander, A.-Z.E. (2001). Do country-specific skills lead to improved labor market positions? An analysis of unemployment and labor market returns to education among immigrants in Sweden. Work and Occupations, 28(2), 210–233.

    Article  Google Scholar 

  • Edin, P.-A., Fredriksson, P., & Aslund, O. (2003). Ethnic enclaves and the economic success of immigrants: Evidence from a natural experiment. The Quarterly Journal of Economics, 118(1), 329–357.

    Article  Google Scholar 

  • Expert Council for Integration. (2018). Integration Report 2018. Federal Chancellery Republic of Austria.

    Google Scholar 

  • Expert Council for Integration. (2020). Integration Report 2020. Federal Chancellery Republic of Austria.

    Google Scholar 

  • Fasani, F., Frattini, T., & Minale, L. (2021). (The Struggle for) refugee integration into the labour market: Evidence from Europe. Journal of Economic Geography, Forthcoming.

  • Fougère, D., & Safi, M. (2009). Naturalization and employment of immigrants in France (1968–1999). International Journal of Manpower, 30(1–2), 83–96.

    Article  Google Scholar 

  • Friedberg, R. M. (2000). You can’t take it with you? Immigrant Assimilation and the Portability of Human Capital. Journal of Labor Economics, 18, 221–251.

    Article  Google Scholar 

  • Grandner, T., & Gstach, D. (2015). Decomposing wage discrimination in Germany and Austria with counterfactual densities. Empirica, 42(1), 49–76.

    Article  Google Scholar 

  • Guzi, M., Kahanec, M., & Kurekova, L. M. (2015). What explains immigrant-native gaps in European Labor Markets: The role of institutions. IZA Discussion Paper, No. 8847, Institute of Labor Economics (IZA), Bonn.

  • Hainmueller, J., Hangartner, D., & Lawrence, D. (2016). When lives are put on hold: Lengthy asylum processes decrease employment among refugees. Science Advances, 2(8), e1600432.

    Article  Google Scholar 

  • Hofer, H., Titelbach, G., Weichselbaumer, D., & Winter-Ebmer, R. (2013). Diskriminierung von MigrantInnen am österreichischen Arbeitsmarkt“, Studie im Auftrag des BMASK, IHS, Wien.

  • Hofer, H., Titelbach, G., Winter-Ebmer, R., & Ahammer, A. (2017). Wage discrimination against immigrants in Austria? Labour, 31(2), 105–126.

    Article  Google Scholar 

  • Huber, P. (2015). What institutions help immigrants integrate?, WWWforEurope Working Paper, No. 77.

  • Hvidtfeldt, C., Schultz-Nielsen, M. L., Tekin, E., & Fosgerau, M. (2018). An estimate of the effect of waiting time in the Danish asylum system on post-resettlement employment among refugees: Separating the pure delay effect from the effects of the conditions under which refugees are waiting. PLoS ONE, 13(11), e0206737.

    Article  Google Scholar 

  • Ibrahim, M. H., Sgro, P., Mansouri, F., & Jubb, C. (2010). Refugees’ labour market access in Australia: A case study of Eritrea African immigrants. Citizenship and Globalisation Research Papers, 1, 84–116.

    Google Scholar 

  • Kahanec, M., & Zaiceva, A. (2009). Labor market outcomes of immigrants and non-citizens in the EU: An East-West comparison. International Journal of Manpower, 30(1/2), 97–115.

    Article  Google Scholar 

  • Kahanec, M., Zaiceva, A., & Zimmermann, K. F. (2011). Ethnic minorities in the European Union: An overview. In M. Kahanec & K. F. Zimmermann (Eds.), Ethnic diversity in European Labor Markets: Challenges and solutions (pp. 1–30). Edward Elgar Publishing.

    Chapter  Google Scholar 

  • Kanas, A., & van Tubergen, F. (2009). The impact of origin and host country schooling on the economic performance of immigrants. Social Forces, 88(2), 893–915.

    Article  Google Scholar 

  • Kongshøj Madsen, P. (2016). Labour market integration of asylum seekers and refugees – Denmark, European Commission, Directorate-General for Employment, Social Affairs and Inclusion, 2016–04.

  • Konle-Seidl, R. (2018). Integration of refugees in Austria, Germany and Sweden: Comparative analysis. European Parliament, Directorate-General for Internal Policies, Policy Department A: Economic and Scientific Policy.

  • Konle-Seidl, R., & Bolits, G. (2016). Labour market integration of refugees: Strategies and good practices. European Parliament, Directorate-General for Internal Policies, Policy Department A: Economic and Scientific Policy.

  • Lechner, F., & Wetzel, P. (2016). Labour market integration of asylum seekers and refugees – Austria., European Commission, Directorate-General for Employment, Social Affairs and Inclusion, 2016–04.

  • Leitner, S., Landesmann, M., Kohlenberger, J., Buber-Ennser, I., & Rengs, R. (2019). The effect of stressors and resilience factors on mental health of recent refugees in Austria’, wiiw Working Paper, No. 169, Vienna.

  • Levanon, A. (2014). Who succeeds as an immigrant? Effects of ethnic community resources and external conditions on earnings attainment. Research in Social Stratification and Mobility, 36, 13–29.

    Article  Google Scholar 

  • Luik, M.-A., Emilsson, H., & Bevelander, P. (2018). The male immigrant-native employment gap in Sweden: Migrant admission categories and human capital. Journal of Population Research, 35(4), 363–398.

    Article  Google Scholar 

  • Marbach, M., Hainmueller, J., & Hangartner, D. (2018). The long-term impact of employment bans on the economic integration of refugees. Science Advances, 4(9), eaap9519.

    Article  Google Scholar 

  • Niederkrotenthaler, T., Mittendorfer-Rutz, E., Saboonchi, F., & Helgesson, M. (2020). The role of refugee status and mental disorders regarding subsequent labour market marginalisation: A register study from Sweden. Social Psychiatry and Psychiatric Epidemiology, 55(6), 697–704.

    Article  Google Scholar 

  • Ortlieb, R., Eggenhofer-Rehart, P., Leitner, S., Hosner, R., & Landesmann, M. (2020). Do Austrian Programmes facilitate labour market integration of refugees? International Migration. https://doi.org/10.1111/imig.12784

    Article  Google Scholar 

  • Parasnis, J., Fausten, D., & Cheo, R. (2008). Do Australian qualifications help? The effect of host country qualification on migrant participation and unemployment. Economic Record, 84(1), 131–140.

    Article  Google Scholar 

  • Porter, M., & Haslam, N. (2005). Predisplacement and postdisplacement factors associated with mental health of refugees and internally displaced persons: A meta-analysis. JAMA, 294(5), 602–612.

    Article  Google Scholar 

  • Ruiz, I., & Vargas-Silva, C. (2018). Differences in labour market outcomes between natives, refugees and other migrants in the UK. Journal of Economic Geography, 18(4), 855–885.

    Article  Google Scholar 

  • Sarvimäki, M. (2017). Labor market integration of refugees in Finland. Nordic Economic Policy Review: Labour Market Integration in the Nordic Countries, pp. 91–114.

  • Schultz-Nielsen, M. L. (2017). Labour market integration of refugees in Denmark. Nordic Economic Policy Review: Labour Market Integration in the Nordic Countries, pp. 55–90.

  • Trygstad, S. (2016). Labour market integration of asylum seekers and refugees – Norway. European Commission, Directorate-General for Employment, Social Affairs and Inclusion, 2016–04.

  • Zimmermann, K. F. (2005). European migration: What do we know? Oxford University Press.

    Google Scholar 

Download references

Funding

This study was financially supported by the Anniversary Fund of the Oesterreichische Nationalbank (Project No. 17166).

Author information

Authors and Affiliations

  1. The Vienna Institute for International Economic Studies (wiiw), Vienna, Austria

    Stefan Jestl, Michael Landesmann & Sebastian Leitner

  2. Statistics Austria, Vienna, Austria

    Barbara Wanek-Zajic

Authors
  1. Stefan Jestl
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Michael Landesmann
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Sebastian Leitner
    View author publications

    You can also search for this author in PubMed Google Scholar

  4. Barbara Wanek-Zajic
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Stefan Jestl.

Ethics declarations

Conflict of interest

The authors declare that they have no conflict of interest.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Support provided by Oesterreichische Nationalbank for this research is gratefully acknowledged (Project No. 17166). The authors would like to thank participants of the Labour Market Workshop 2019 in Vienna and the IAB-ECSR interdisciplinary conference ‘Refugee Migration and Integration Revisited: Lessons from the Recent Past’; two anonymous reviewers and the editor for their detailed and very helpful comments and suggestions. An earlier version of this paper circulated under the title: ‘Employment Gaps Between Refugees, Migrants and Natives: Evidence from Austrian Register Based Labour Market Data’. 

Appendix

Appendix

See Tables 3, 4, 5, 6, 7, and 8.

Table 3 Descriptive statistics on total sample, averages over total period
Full size table
Table 4 Regression results, total employment
Full size table
Table 5 Regression results by gender, total employment
Full size table
Table 6 Regression results by age cohort, total employment
Full size table
Table 7 Regression results by educational attainment, total employment
Full size table
Table 8 Regression results by type of employment
Full size table

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Jestl, S., Landesmann, M., Leitner, S. et al. Trajectories of Employment Gaps of Refugees and Other Migrants: Evidence from Austria. Popul Res Policy Rev 41, 609–669 (2022). https://doi.org/10.1007/s11113-021-09666-3

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11113-021-09666-3

Keywords

JEL Classification

Search

Navigation