January 2007

IZA DP No. 2551: Employment Integration of Refugees: The Influence of Local Factors on Refugee Job Opportunities in Sweden

This article studies the importance of local conditions for the employment integration of refugees in Sweden, this in contrast to most studies on immigrant economic integration primarily conducted on the national level or for the larger cities. The data used in the analysis is on male and female natives and twelve refugee groups for the year 2003. Besides monitoring the regional variation in employment integration of twelve refugee groups, this paper, with the use of logistic regressions, estimates the effect of individual and human capital characteristics, internal migration, municipality, local labour market and economic sector factors on the refugees’ odds of being employed. The local variations of refugees’ integration into the labour market were partly a result of internal migration, in most cases from less to more populated municipalities. The job opportunities were better in Stockholm than in other big cities like Malmö and Göteborg. The local unemployment and employment rates, a proxy for the local supply of jobs, significantly affected the individual refugees’ chances to obtain employment. This also applies to the size of the labour market through increased diversification in the supply of job openings. We also find that the structure of the local economy affected the refugees’ probability of obtaining employment. Areas with lower general education and skill levels were positively related, whereas, for example, university localities were negatively related to refugees’ employment chances. Refugees had higher probabilities of being employed in industry in less population-dense areas and in the private service sector in larger cities.