1887

OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

Integration of Immigrants in OECD Countries

Do Policies Matter?

This working paper assesses the ease of immigrants' integration in OECD labour markets by estimating how an immigration background influences the probability of being active or employed and the expected hourly earnings, for given individual characteristics. Applying the same methodology to comparable data across twelve OECD countries, immigrants are shown to significantly lag behind natives in terms of employment and/or wages. The differences narrow as years since settlement elapse, especially as regards wages, reflecting progressive assimilation. Strong differences in immigrant-to-native gaps are also observed across countries, and the paper shows that they may, to a significant extent, be explained by differences in labour market policies, in particular unemployment benefits, the tax wedge and the minimum wage. In addition, immigrants are shown to be overrepresented among outsiders in the labour market and, as such, highly sensitive to the difference in employment protection legislation between temporary and permanent contracts.

English

Keywords: wages, employment, labour market policies, integration, immigration
JEL: J31: Labor and Demographic Economics / Wages, Compensation, and Labor Costs / Wage Level and Structure; Wage Differentials; J64: Labor and Demographic Economics / Mobility, Unemployment, Vacancies, and Immigrant Workers / Unemployment: Models, Duration, Incidence, and Job Search; J61: Labor and Demographic Economics / Mobility, Unemployment, Vacancies, and Immigrant Workers / Geographic Labor Mobility; Immigrant Workers
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