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Labour Market Status and Migration Dynamics

  • Economics


In this empirical paper we assess how labour market transitions and out- andrepeat migration of immigrants are interrelated. We estimate a multi-statemultiple spell competing risks model with four states: employed, unemployedreceiving benefits, out-of-the-labour market (no benefits) and abroad. Wediscuss one-step ahead transitions from all four states and the transitionprobability, including all intermediate transitions, from employment. Based onthe estimated parameters we simulate the labour-migration dynamics for asynthetic cohort to derive relevant economic indicators, e.g. the probabilityof experiencing an unemployment spell.For the analysis we use data on recent labour immigrants to TheNetherlands, which implies that all migrants are (self)-employed at thetime of arrival. We find that many migrants leave the country after aperiod of no-income. Employment characteristics and the country of originplay an important role in explaining the dynamics. The microsimulations ofsynthetic cohorts reveal that many migrants experience unemployment spells,but ten years after arrival only a few are unemployed. They also indicatethat the Credit Crunch will not only increase the unemployment among migrantsbut also departure from the country. An increase in the number of migrantsfrom the EU accession countries will lead to more dynamics. We do not expectthat the recent simplification of the entry of high income migrants will havea lasting effect, as many of those migrants leave fast.

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