Refugee immigrants contributed to higher wages

Refugee immigrants contributed to higher wages. That is one of the conclusions of a new SNS report, Immigration and the native labour market experiences from Denmark, by the economist Mette Foged, that was presented at a seminar at SNS on 31 January 2017.

The study analyses the impact of the influx of refugees to Denmark 1995-2003 on native workers’ mobility, wages and employment. The results show that wages increased, especially for young and low tenured workers. In addition, employment was unaffected despite the increased supply of labour.

According to Foged the positive effects appear to be due to low-skilled natives moving to more complex jobs. Refugee immigrants mainly competed for manual-intensive occupations. That nudged low-skilled natives to apply for jobs and sectors in which there was less competition from immigrants, for example, jobs demanding language skills and knowledge of local standards and regulations.

According to Pieter Bevelander, Professor in International Migration and Ethnical Relations, the study makes an important contribution as it confirms previous international research on the effects of immigration on the labour market. However, he emphasised the importance of discussing the possible effects that may arise from a segmentation of the labour market based on ethnicity.

Like Foged, Bevelander highlighted that in order to achieve positive results there must be the opportunity for immigrants to join the labour market:

“For Sweden, the question is the generally low employment rate of people from non-OECD countries. That is a problem we need to address.”

Lars Calmfors, Professor Emeritus in International Economics, welcomed the study and its contemporary theme. He stated that entry-level jobs with lower wages could be an effective measure. However, there is some uncertainty on the matter, which is why such a measure should be introduced with caution.