DP2730 Settlement Policies and the Economic Success of Immigrants

Author(s): Olof ├ůslund, Per-Anders Edin, Peter Fredriksson
Publication Date: March 2001
Keyword(s): Immigration, Labour Market Outcomes, Settlement Policies
JEL(s): J15, J18, R23
Programme Areas: Labour Economics
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=2730

Many developed countries, e.g. the UK, Germany, and Sweden, use or have used settlement policies to direct the inflow of new immigrants away from immigrant dense metropolitan areas. We evaluate a reform of Swedish immigration policy that featured dispersion of refugee immigrants across the country, but also a change in the approach to labour market integration. We focus exclusively on how immigrants fared because of the policy. The results indicate that immigrants experienced fairly substantial long-run losses because of the policy. We also find that only a smaller share of this effect was associated with the dispersion of immigrants across regions. The larger share of the impact appears to stem from a common component that affected immigrants regardless of where they were located. Our somewhat speculative reading of this result is that it can be traced to a shift in emphasis of integration policy from a policy focusing on labour market assimilation to one of income support.