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Internal migration and labour market outcomes among refugees in Sweden Maria Mikkonen To My Grandfather Sven Perfors Preface First I would like to thank my advisors. Mats Hammarstedt, my supervisor for the last year, has contributed to this thesis in so many ways. Your friendly attitude and encouragement have been invaluable, so have your suggestions and comments on several versions of this manuscript. Thank you so much for your patience and your confidence in me. Jan Ekberg introduced me to the idea of this thesis. Thank you for your valuable advice and support. I have gained much insight in this topic from our discussions. Olof Åslund was the discussant for the final seminar for this thesis. Your suggestions strongly contributed to my work. I am also grateful for comments by and discussions with Dominique Anxo, Lennart Delander, Håkan Locking, Jonas Månsson, Harald Niklasson, and Ghazi Shukur. My colleagues and friends at the department have made working hours much more enjoyable, thank you all. A special thanks to my fellow PhD students and Viktoria. Brian Fenn helped me correct the English language. Thanks for your excellent suggestions. Financial support from the Swedish Association of Local Authorities is also gratefully acknowledged. i I want to thank my friends, and especially Elisabeth, Maria, Regina, Therése A. and Therése A.L. for genuine friendship. My parents, Inger and Esa have always meant a great deal to me. Thank you for your love and support. Finally, I would like to thank Alexander, Gun, and Totte for the same reasons. Växjö, May 2006 Maria Mikkonen ii Contents Introduction 1 1 Immigrants in Sweden 5 1.1 Immigration and the immigrant population . 5 1.2 Immigration and refugee policy . 10 1.3 Integration policies . 14 1.4 Thelabourmarketpositions. 16 2 Internal migration among refugees 21 2.1 Introduction............................ 21 2.2 Theoreticalframework . 24 2.3 Dataanddescriptivestatistics. 29 2.4 Empirical specification . 37 2.4.1 Factors affecting the internal migration decision and labourmarketstatus . 37 2.4.2 Estimating internal migration propensities . 40 2.4.3 Estimating labour market outcomes . 41 2.5 Empiricalresults ......................... 43 iii 2.5.1 Internal migration propensities . 43 2.5.2 Labourmarketoutcomes. 47 2.6 Conclusions ............................ 55 Bibliography .............................. 57 Appendix 2.A Local labour market regions (LLM) . 69 Appendix 2.B Classification of municipalities . 69 iv List of Tables 1.1 Index for employment rates among foreign-born individuals (16–64yearsofage). ...................... 18 2.1 Variable definitions. 31 2.2 Mean values or proportions of individuals’ characteristics in period t0. ............................. 32 2.3 Movers and stayers per period t ................. 34 2.4 Internal migration flows among Bosnian refugees in Sweden, period t0 to period t9....................... 35 2.5 Differences in employment and log annual earnings between movers and stayers during their first years in Sweden. The em- ployment numbers show the fraction of the group with positive earnings............................... 36 2.6 Number of refugees with Swedish citizenship . 36 2.7 Marginal effects from logit estimations of the probability of beingamoverindifferentperiods,men . 45 2.8 Marginal effects from logit estimations of the probability of beingamoverindifferentperiods,women . 46 v 2.9 Marginal effects from logit estimations of the probability of being employed in t given that the individual was unemployed int-1(includingMOVERt-1),men . 49 2.10 Marginal effects from logit estimations of the probability of being employed in t given that the individual was unemployed int-1(includingMOVERt-1),women . 50 2.11 Income estimations of women and men in t9, 34–64 years of age. Income from work in SEK (logaritic form). 54 vi Introduction In the year 2006, more than one million of the individuals living in Sweden, or about 12 per cent of the total population, had been born abroad. The large share of foreign-born individuals implies that immigrants have become increasingly important on the Swedish labour market. The labour market positions among immigrants in Sweden are relatively well documented.1 Different studies have shown that labour force migrants who immigrated during the 1950s and 1960s were doing well on the Swedish labour market. It is also a fact that refugees who arrived from Eastern Europe during the same period of time did quite well on the labour market. However, as immigration changed from labour force migration to refugee migration in the 1970s, the labour market position of immigrants started to deteriorate markedly. The deterioration continued during the 1980s and the situation became even worse during the recession of the 1990s.2 Despite the fact that immigrants’ labour market position in Sweden is relatively well documented and despite the fact that refugees has been hit 1See Wadensjö (1972); Ekberg (1983); Aguilar and Gustafsson (1991); Ekberg (1994); Rooth (1999); Aslund˙ (2000); Hammarstedt (2001); Österberg (2000). 2See Edin and Aslund˙ (2001) and Gustafsson, Hammarstedt and Zheng (2004). 1 the hardest by unemployment and low earnings during recent years, only a few studies have focused on the determinants behind their labour mar- ket positions. Ekberg and Ohlson (2000) found large regional differences in the labour market position among refugees in Sweden. The results in Hammarstedt (2002, 2003a) pointed in the same direction. In a more recent study, Rooth and Aslund˙ (forthcoming) have shown that the point of time for immigration as well as the place of residence is of great importance for the labour market outcome for refugees. Even less attention has been paid to how refugees can improve their labour market positions. One way for refugees to do so is by internal mi- gration. Little research exists on the location choice and internal migration pattern among immigrants and refugees in Sweden. Aslund˙ (2005) found that a substantial representation from the individual’s birth country at the relocation site is of importance for immigrants’ decisions to relocate and for their location choices. Boman (2006) showed that immigrants and refugees are more mobile than native Swedes, but that settlement in ethnic enclaves reduces geographical mobility for non-Nordic immigrants. These findings are consistent with the results from US studies. Bartel (1989) found that the presence of co-ethnics is an important determinant of immigrants’ location choice. Jaeger (2000) showed that the presence of immigrants is important (i.e. that immigrants prefer "international neighbours") without regard to their country of origin. Other studies, for example Belanger and Rogers (1992), show that internal migration goes in the direction of regions with populations that are already large.3 3However, Bartel (1989) finds that highly educated groups tend to move to less 2 This thesis contributes to research regarding immigrants on the Swedish labour market since it focuses on internal migration decisions and labour market outcomes for refugees from Bosnia-Herzegovina living in Sweden. The thesis consists of two parts. The first part contains an overview of immi- gration to Sweden and the immigrant population. Furthermore, it also deals with immigration, refugee, and integration policies. Finally, an overview of the labour market position among immigrants is presented in the first part. The second part contains an empirical investigation. This section of the thesis focuses on refugees from Bosnia-Herzegovina. Internal migration de- cisions and labour market outcomes as regards Bosnian refugees are studied. Several interesting results emerge from the study. We find, for example, that refugees during their first nine years in Sweden migrate towards big cities. We also discover that migration within Sweden is more common among im- migrant and refugee residents of smaller cities and especially rural areas. Furthermore, migration is negatively related to marriage and children, posi- tively related to unemployment and education, and is most common in the first years after arrival. We also conclude that internal migration alone does not improve the labour market situation for refugees in terms of income, though the chances for male refugees to obtain a job might increase. Inte- gration signals, such as citizenship, seem to be of great importance for the integration of refugees into the Swedish labour market. ethnically-concentrated areas compared to where they resided initially. 3 Chapter 1 Immigrants in Sweden 1.1 Immigration and the immigrant population Sweden has received a substantial number of immigrants since the Second World War.1 In 1940, only one per cent of the Swedish population was born abroad. During the following decade, almost 200,000 individuals immigrated to Sweden. Most of the immigration during the 1940s took place after the war, and the immigration was primarily made up of refugees from the Baltic countries and Poland. The inflow continued in the 1950s, with 260,000 immigrants arriving. Since Sweden had not been involved in the world war and had an intact in- dustry, the demand for Swedish industrial products increased from abroad. This led to a labour shortage, which in turn changed the character of immi- gration towards labour force immigration. The labour force immigration was made possible by three institutional 1For a survey of immigration to Sweden, see Lundh and Ohlsson (1994). 5 changes: first, the agreement about a common Nordic labour market in 1954, removing the need for residence and work permits for immigrants from the Nordic countries; second, search for labour by joint actions with recruitment agencies and firms across Europe instituted by the Swedish Labour Market Board in co-operation with local trade unions and companies; and, third, the approval of the 1953 Work Regulation of the OEEC and the Alien Act of 1954. This act made it possible for non-Nordic immigrants to enter Swe- den individually and then apply for a work permit here. The labour force migration during the 1950s consisted mostly of immigrants from the Nordic countries and Western and Southern Europe. Besides this, there was also refugee immigration from Hungary during the 1950s.

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