The effects of labour supply increase caused by immigration to Sweden: The substitution between native and foreign born labourers

Abstract: In the aftermath of the migration crisis which Europe faced during 2015 Sweden's migration policy has been adapted to a significantly more restrictive one. As a result of the significant influx of people into the country, the government is concerned about the integration of the immigrants into the labour market. This thesis analyses both empirically and theoretically whether natives and foreign born labourers are perfect substitutes or not on the labour market using descriptive data and an econometric linear model with data over wages across 109 different professions during the years 2004 to 2013. Native and foreign born labourers are found to be imperfect substitutes on the labour market.