Empirical Economics

, Volume 52, Issue 1, pp 31–58 | Cite as

Local labor markets and earnings of refugee immigrants

  • Anna GodøyEmail author


This paper estimates how local conditions at the time of immigration influence later outcomes for refugee immigrants to Norway, exploiting the quasi-experimental nature of the Norwegian system for settlement for “quota” or resettlement refugees. A unique administrative dataset with assigned settlement municipalities is used to identify the causal effect of initial location characteristics. Being placed in a labor market where other non-OECD immigrants do well increases own annual labor earnings up to 6 years after immigration. Extended models suggest that this effect is not driven by individual scarring effects: when controlling for the contemporaneous employment rate in the assigned region, effects of initial conditions disappear. Rather, the effects appear to be due to persistence in local labor market conditions combined with limited geographical mobility in response to adverse labor market conditions.


Immigration Settlement policies Location choice Labor market outcomes 

JEL Classification

J15 J18 J61 R23 



I wish to thank Olof Åslund, Barbara Petrongolo, Knut Røed, Edwin Leuven, Pål Schøne, Andreas Kotsadam and seminar participants in Århus (ESPE), Torino (EALE) and Bonn (IZA Annual Migration Meeting), as well as two anonymous referees for valuable comments. Data made available by Statistics Norway have been essential.


  1. Åslund O (2005) Now and forever? initial and subsequent location choices of immigrants. Reg Sci Urban Econ 35(2):141–165CrossRefGoogle Scholar
  2. Åslund O, Rooth D (2007) Do when and where matter? Initial labour market conditions and immigrant earnings. Econ J 117(518):422–448CrossRefGoogle Scholar
  3. Bhuller M (2009) Inndeling av norge i arbeidsmarkedsregioner. Statistisk Sentralbyrå (SSB). Notater 24Google Scholar
  4. Blom S (2011) Holdninger til innvandrere og innvandring 2011. Statistisk Sentralbyrå (SSB). Rapporter 41Google Scholar
  5. Chiswick B, Cohen Y, Zach T (1997) The labor market status of immigrants: effects of the unemployment rate at arrival and duration of residence. Industrial and labor relations review, pp. 289–303Google Scholar
  6. Kahn L (2010) The long-term labor market consequences of graduating from college in a bad economy. Labour Econ 17(2):303–316CrossRefGoogle Scholar
  7. Kavli HC, Svensen E (2001) Overføringsflyktninger - uttak og integrering. Fafo-notat 8Google Scholar
  8. Longva P, Raaum O (2002) Unemployment and earnings assimilation of immigrants. Labour 16(3):469–489CrossRefGoogle Scholar
  9. Nekby L, Pettersson-Lidbom P (2012) Revisiting the relationship between ethnic diversity and preferences for redistribution. Research Papers in Economics, Stockholm University, Department of Economics, 9:1–34Google Scholar
  10. Olsen B (2014) Flyktninger og arbeidsmarkedet, 4. kvartal 2012. Statistisk Sentralbyrå (SSB). Rapporter 06Google Scholar
  11. Oreopoulos P, von Wachter T, Heisz A (2012) The short-and long-term career effects of graduating in a recession. Am Econ J Appl Econ 4(1):1–29CrossRefGoogle Scholar
  12. Raaum O, Røed K (2006) Do business cycle conditions at the time of labor market entry affect future employment prospects? Rev Econ Stat 88(2):193–210CrossRefGoogle Scholar
  13. Ruhm C (1991) Are workers permanently scarred by job displacements? Am Econ Rev 81(1):319–324Google Scholar

Copyright information

© Springer-Verlag Berlin Heidelberg 2016

Authors and Affiliations

  1. 1.Institute for Social ResearchOsloNorway

Personalised recommendations