An unstable equilibrium: the Italian immigrants' inclusion model facing the pandemic crisis test

Abstract

The Italian immigrants' inclusion model has been described as a "low unemployment, bad jobs" equilibrium: immigrants have relatively high employment rates but tend to be segregated in low-quality jobs. However, as these jobs are also unstable, so is the equilibrium: during periods of recession, immigrants may face higher risks of labor-market exclusion. This paper investigates immigrant penalties in terms of employment probabilities, job loss, labor-market (re)entry, and job quality throughout the first year of COVID-19 crisis, by analyzing data from the 2019 and 2020 ISTAT Labor Force Survey. We find that the pandemic crisis accelerated an already ongoing erosion of immigrants' relative employment advantage, while at the same time increasing their segregation in low-quality jobs. The deterioration of immigrants' employment chances is chiefly driven by increased barriers in (re)entering the labor market which, especially for women, might be due to self-selection into inactivity. These findings suggest that the structural factors that have historically facilitated the activation of immigrant workers might have become factors of instability.