The Economic Assimilation of Immigrants : A Study on the Economic Assimilation of Foreign-Born Immigrants Based on a Fixed Effects OLS Model and Panel Data of 28 OECD Countries Between 2004–2018

Abstract: For several decades, the subject of immigrants and the integration of them has been a highly debated subject, both in politics and research. As the number of immigrants only seems to increase, the relevance of economic assimilation does aswell. The existing research within this field largely focuses on immigrants’ wage development while less attention is paid to their employment levels, implying that there are gaps in the literature. This thesis aims to contribute to filling the gap by examining how the role of governmental spending on labor market programs affects the employment rate amongst immigrants as a proxy for economic assimilation. This paper utilizes a panel data that observes 28 OECD member countries between the years 2004–2018. All the observations are obtained from the OECD Statistics database. The panel data is applied to a fixed effects linear Ordinary Least Squares (OLS) model. While the hypothesis in this paper suggests that economic assimilation is promoted by increased LMP spending, the results indicated on the opposite; increased LMP spending seems to decrease immigrant employment rate by 2.4% and thus not promoting economic assimilation of immigrants. Though uncertain, this effect seems to weaken considering time lags.