Scholars have pointed out the two main interrelated determinants of the economic assimilation of immigrants, namely the self-selection pattern of immigrants from their country of origin (Chiswick, 1978; Borjas, 1985), and the acceptance background of the host country (Borjas, 1990; Portes and Rumbaut ). (the year 1990). Understanding the joint contribution of these two factors to the economic assimilation of immigrants is important for decision-making (Borjas, 1990; Card, 2005).
The self-selection mode of immigrants is one of the main determinants of their economic assimilation. The concept of “self-selection” was proposed by Roy (1951) in the context of career choice, but has since been applied to many types of rational choices. Borjas (1987) introduced this point in the study of the decision of whether and where potential migrants migrate in the country of origin. He and other scholars believe that immigrants are not a random sample drawn from the population of their country of origin, but an active group self-selected from the population at risk.
Immigration brings the risks and costs that migrants decide to bear to improve the economic conditions of the destination country (Chiswick, 1979; Borjas, 1987; Chiswick and Miller, 2007). Descriptive statistics show that immigrants usually actively self-select from the population at risk, that is, they are more educated than their non-immigrant counterparts in their country of origin (Docquier and Marfouk (2006)).
Context of reception and assimilation
The second major determinant of the economic assimilation of immigrants is the characteristics of the host country, including immigration and welfare policies and market structure. Obviously, the reception situation in the host country not only affects the assimilation of immigrants, but also affects the classification of their entry into these countries. The two destination countries in this study have different immigration policies for economic immigrants. During the study period (1990-2000), the United States adopted stricter policies on immigration. Since 1965, it has been mainly based on family reunions and to a lesser extent professional qualifications (Duleep and Regets, 2014).
Currently, under the category of “family assistance”, about three times the number of immigrants accepted as a “work-based” preferential system (OECD, 2016). Finally, there is an additional policy coverage that specifies the upper limit of immigration in the country of origin, which means that permanent immigrants from a single country cannot emigrate to the United States within a fiscal year that exceeds 7 percent of the total population.
The United States has always been the most popular destination for German immigrants. In 2000, there were approximately 1.1 million German-born immigrants in the United States, accounting for about one-third of all immigrants in Germany during the same period (OECD, 2015). More than 90% of them have a high level of English. By 2013, due to family considerations (mainly as immediate relatives of American citizens), almost 60% of American immigrants of European origin became legal permanent residents of the United States, and another 25% were based on employment considerations Qinghou and Batalova, 2015).
During the investigation, Sweden had fewer restrictions on German immigration. During the 1990-1994 period, German immigration was still restricted to people who had job opportunities or had connections with people living in Sweden. However, with Sweden’s accession to the European Union in 1995, German immigration to Sweden is no longer restricted.
Between 1990 and 2000, about 4,300 German immigrants entered Sweden, most of which (about 80%) entered Sweden after 1994. We tested the difference (2000) in the determinants of income increase between the two German immigrant groups in Sweden (1990-1994 and 1995-1995), and found no evidence of this difference. Therefore, we classify German immigrants who arrived in Germany from 1990 to 2000 into one category.
The second host country factor that affects the assimilation of immigrants is the welfare policy of the destination. According to Espen-Andersen, the United States has a free welfare system based on private welfare arrangements, mainly employer-sponsored welfare. In contrast, Sweden has a social democratic system in which most of the proceeds are mainly financed through taxation and provide services to the entire population (Esping-Andersen, 1990). Even though some social welfare was reduced during the economic crisis in the 1990s, Sweden’s welfare policy did not undergo major changes until after 2006, which is the last year of our investigation.
Finally, the operation of the destination labor market affects the economic status of immigrants in many ways (Borjas, 1990; Portes and Rumbaut, 1990; Posner and Weyl, 2018).
- First, the size of the high-skilled and low-skilled labor force affects the demand for immigrants at each skill level.
- Second, the high level of employment protection provided by legislation and trade unions may reduce employers’ willingness to hire migrant workers.
- Third, the economic cycle has a serious impact on the economic status of immigrants, because finding employment opportunities during the recession is particularly disadvantageous (Kogan, 2007).
The two countries to be compared have significant differences in the way their labor markets operate. Although the United States is characterized by a flexible labor market and high returns on high levels of income determinants (mainly human capital), and therefore high income inequality (higher than Germany), Sweden’s income inequality is relatively low (Lower than Germany). In Germany), and the union’s high level of participation in income determination. In addition, Sweden has a larger low-skilled labor force than the United States. In Sweden, the proportion of 25-64-year-old natives with a degree in 2000 was about 15% (Statistics Sweden, 2009), while the proportion in the United States was 24.5% (Bauman and Graf, 2003).
In addition, Sweden experienced a severe economic recession and high unemployment rate in the 1990s. This is the decade of research. It began to rise in 1992. The unemployment rate in Sweden stabilized at around 9-10% from 1993 to 1998, then began to decline, and fell to 5.5% in 2000. In contrast, the unemployment rate in the United States reached a high of 7.5% in 1992, then continued to decline, reaching 5.6% in 1995 and 4% in 2000 (World Bank, 2017). Therefore, it is difficult for immigrants bound to Sweden to fully integrate there.
During the study, it is also important to consider the average wages in Sweden and the United States compared to Germany. The 2000 average wages in Sweden, the United States, and Germany (at constant 2015 prices, calculated at 2015 U.S. dollar purchasing power parity) were 32,400; 51,300; and 40,700. In 2005, these numbers were 35,000. 53,800; and 41,100 (OECD Statistics, 2017). In other words, compared with Sweden, the United States is more attractive to highly skilled Germans. Compared with Germany, Germans who immigrate to the United States (1.26-1.31) have a much better purchasing power parity ratio between the United States and Germany (PPP ratios between Sweden and Germany are 0.80-0.85).
Obviously, the purchasing power parity of average wages in these three countries is a rough measure of the economic conditions of each country. However, it can serve as a broad indicator for the three countries involved.
Economic assimilation of immigrants
International immigrant students suggest that immigrants (regardless of their specific level of human capital) will suffer considerable social and economic difficulties in the labor market of their society upon arrival (for example, DeVoretz, 2006). Immigrants at that stage were not familiar with the new labor market. They have limited access to information and social connections; they do not fully master the language; their professional skills cannot always be transferred to the new economic system, and sometimes they even face discrimination. As a result, immigrants (even highly skilled) are at a disadvantage when they arrive compared to locally-born workers with similar attributes (Eckstein and Weiss, 2002; Chiswick and Miller, 2009).
However, over time, many immigrants have experienced upward career and economic mobility, thereby improving their relative market position. Indeed, after a period of time in the host society, it was found that immigrants had repeatedly narrowed the initial income gap with the equivalent native-born population, especially among those with higher levels of human capital (Chiswick, 1978, 1979; Borjas) , 1990, 1994; LaLonde and Topel, 1990; Borjas and Tienda, 1993; Lofstrom, 2000).
Although human capital has great influence in shaping the economic destiny of immigrants, the acceptance environment prevailing in specific countries plays a role in mediating the impact of training and skills (and specific occupations) on the inclusion of highly skilled immigrants in the labor market. effect. The experience of several countries also shows that the economic assimilation of highly skilled immigrants may not be taken for granted, depending on the country’s immigration policies, nationality laws, economic opportunities in the labor market, the occupational labor market employed by migrant workers, and welfare institutions (Lewin-Epstein et al., 2003; Cohen and Haberfeld, 2007; Chiswick and Miller, 2009; Cohen, Haberfeld and Kogan, 2011).