Abstract
This paper examines whether unemployment of non-western immigrant workers in the Netherlands was disproportionally affected by the Great Recession. We analyze unemployment data covering the period November 2007–February 2013 finding that the Great Recession affected unemployment rates of non-western immigrant workers in absolute terms more than unemployment rates of native workers. However, in relative terms there is not much of a difference. We also find that the sensitivity of individual job finding rates to the aggregate state of the labor market does not differ between natives and non-western immigrants. In combination our findings suggest that the Great Recession did not have a different impact on the unemployment of non-westerns immigrants and native Dutch.
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Notes
For an overview of recent developments in the Dutch labor market see Van Ours (2012).
Note that the national unemployment rate is based on a definition that takes the hours of work into account. If an individual works less than 12 h per week but would like to work more than 12 h per week this individual is considered to be unemployed. In our dataset we do not make such a distinction according to hours of work.
Table 1 Unemployment; linear probability estimates The cyclical effect for western immigrants is about the same as for native workers. For workers with an unknown immigrant status the cyclical effect is smallest. This may have to do with the fact that workers with an unknown immigrant status are observed only in the first years of the sample when unemployment rate did not vary so much.
The LR-test statistic is equal to 3.8, while the critical \(\chi ^2\) value with 2 degrees of freedom is equal to 6.0.
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The authors thank Rob Alessie for useful comments.
Appendix: Information on the LISS Data
Appendix: Information on the LISS Data
1.1 Definition of Variables
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Non-western immigrant: Dummy variable if an individual is a non-western immigrant (first generation or second generation); reference group: natives. For some individuals the immigrant status is unknown. Western immigrants are from a country in Europe (excl. Turkey), North America, Oceania, Indonesia or Japan. Immigrants with a non-western foreign background are from Turkey or countries in Africa, Latin America and Asia, with the exception of Indonesia and Japan. In some estimates additional dummy variables for western immigrants and workers with an unknown immigrant status are included.
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Education: Dummy variables for intermediate vocational, higher vocational and university education; reference group: less than intermediate vocational education.
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Children: Dummy variables if the individual has 1 child, or 2 or more children; reference group: no children.
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Men: Dummy variable if an individual is a man; reference group: women.
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Urbanization: Dummy variables based on population density (per \(\hbox {km}^2\)) of the place of residence of an individual: very urban (1,500–2,000), moderately urban (1,000–1,500), slightly urban (500–1,000), not urban (less than 500); reference group: extremely urban (2,500 or more).
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Unemployment rate: Monthly unemployment rate at the national level.
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A person was considered to be employed if one of the following answers was selected: paid employment, works or assists in family business, autonomous professional, freelancer, or self-employed.
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The following situations were treated as state of unemployment: job seeker following job loss, first-time job seeker, exempted from job seeking following job loss, performs unpaid work while retaining unemployment benefit, or performs voluntary work.
1.2 Descriptive Statistics
The top part of Table 4 lists descriptive statistics of the LISS panel for the analysis of the monthly data. In total we have 429,243 monthly observations of 12,090 individuals. In this sample 7 % of the observations are on non-western immigrants, 57 % on natives, 8 % on western immigrants and 28 % of individuals with an other including unknown immigrant status. The mean age of the individuals is 42.6, while 53 % of them are males. On average 8 % of the person-month observations refer to an unemployment spell. The average national unemployment rate of the sample period was 5.3 %.
The bottom part of Table 4 shows descriptive statistics of the dataset used in the duration analysis. We observe information about 1134 unemployment durations that started during the sample period. Of these unemployment spells, 12 % referred to non-western immigrants and 60 % to natives. This part of the table also provides information on the distribution of the sample over educational categories, presence of children, age categories and urbanization categories. The average length of the unemployment spell was 9.6 months, while 54 % of the spells ended because a job was found. Half of the sample consists of unemployment durations of males.
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Cerveny, J., van Ours, J.C. Unemployment of Non-Western Immigrants in the Great Recession. De Economist 161, 463–480 (2013). https://doi.org/10.1007/s10645-013-9216-2
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DOI: https://doi.org/10.1007/s10645-013-9216-2