Place and immigrant labour market integration: A sequence analysis approach

Abstract

Although the process of integrating immigrants into the labor market unfolds over many years, it is often modeled as outcomes (e.g. employment) at specific points in time. We contribute to the literature by providing empirical evidence of the sequence of events leading to active labor market participation of East African and EU15 immigrants to Sweden, whom we follow for up to 28 years. By combining the method of sequence analysis with binomial logit estimation, we can explain why individuals are sorted into different representative labor market sequences. A further contribution is that along the usual initial conditions (individual and geographic), we employ longitudinal micro data to find (1) representative sequences of movements between various types of neighborhoods and (2) an empirical estimate of individual ability, which turns out to be a strong predictor for immigrants entering an active labor market trajectory. Our results show that East Africans tend to reside in neighborhoods with a high degree of socioeconomic and ethnic segregation. Despite this, their labor market activity seems to be less influenced by neighborhood trajectories than EU15 immigrants. The labor market activity of EU15 immigrants and female East African immigrants is positively related to residing in less ethnically segregated and socioeconomically stronger neighborhoods. Our results are relevant to policy development since they point to the importance of the initial location of immigrants and their subsequent residential mobility.