A macro perspective on employment integration of immigrants in Sweden : A municipal comparision

Abstract: Looking at the labor market situation of Sweden today, the employment rates of immigrants are substantially lower compared to persons born in Sweden. There are, however, major differences in the degree to which immigrants are active in the labor force between different municipalities. While there has been considerable research on the employment integration of immigrants at the national level, less has been done to explain these regional variations. The aim of this study is to analyze municipal differences in employment integration success between Sweden’s municipalities. Using register data from Statistics Sweden, aggregated at the municipal level, multiple regression analysis is conducted to estimate the effects of immigrant characteristics and local labor market characteristics on employment outcomes. The regression results suggest that municipal differences in integration success, to some degree, could be attributed to municipalities attracting immigrants with different levels of human capital. However, local factors are of importance as well. The employment rates of immigrants were significantly affected by the employment rates of persons born in Sweden, a proxy for the local supply of jobs.