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Are migrants more likely than nationals to be unemployed during economic crisis?

Sudharshan Canagarajah's picture

There has recently been heated debate regarding migrant employment behavior in host countries during and after economic crises. The popular view is that migrants have an incentive to remain unemployed as long as they have access to unemployment benefits, free health care, and education. Thus, many argue, that migrants should not be provided with benefits as they create perverse incentives for migrants to stay unemployed. However, recent data does not support such a simple relationship. In fact recent data shows that sometimes migrants that lose jobs tend to find work quickly during and after crises.

A recent article in the Economist based on OECD Migration Outlook 2011 provided some useful data to show the complex patterns of migrant unemployment compared to nationals. The data shows that the relationship between migrants and unemployment incidence depends on a variety of labor market conditions including unemployment benefits, skill level of migrants, business cycle patterns, the sectors they are employed in, and labor market flexibility.

In Belgium and Spain migrants were more likely to unemployed, in the US  and the UK they were equally likely to unemployed, while in Hungary and Czech Republic migrants were less likely to be unemployed, thannationals. One interesting observation from the report is that countries in which migrants are in high skilled occupations (Hungary and Czech republic) they are less likely to be unemployed than nationals, while countries where migrants are young and unskilled (Spain and Belgium) they are more likely to be unemployed.

According to a focus group study that the World Bank’s Europe and Central Asia (ECA) region migration program (MIRPAL) carried out in early-2009, after the crisis set in Russia, migrants that lost jobs found another job quickly given that they did not have easy access to state benefits and were forced to “search” hard for jobs which were outside their main domain of sectoral activity. The pattern depends on their skill, sector of employment and country of origin. All this shows that migrants are not less “mobile” between sectors than nationals but tend to find jobs with short duration of unemployment spells.

Despite this finding, the reality remains that migrants are more vulnerable during an economic crisis than native workers. They tend to be overrepresented in sectors more sensitive to the business cycle, they have less secure contractual arrangements, they are overrepresented in low-skilled occupations, and they often face discrimination in hiring and layoffs.

Although there is need for more systematic analysis of data, a quick review of recent reports, shows that migrants are not more likely to become unemployed or remain unemployed during economic crisis. And also providing social protection or other benefits are not directly correlated with the experience and duration of unemployment of migrants than native born. Let us not draw simple and quite unhelpful inferences for migration policy without referring to facts!

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