Abstract
This paper provides a comprehensive quantitative assessment of the employment performance of first- and second-generation immigrants in Belgium compared to that of natives. Using detailed quarterly data for the period 2008–2014, we find not only that first-generation immigrants face a substantial employment penalty (up to − 30% points) vis-à-vis their native counterparts, but also that their descendants continue to face serious difficulties in accessing the labour market. For descendants of two non-EU-born immigrants the social elevator appears to be broken. Indeed, estimates suggest that their employment performance is no better than that of their parents (whose penalty averages 19% points). Immigrant women are also particularly affected. While they are all found to face a double penalty because of their gender and origin, for women originating from outside the EU the penalty is generally even more severe. Among the key drivers of access to employment, we find: (1) education (especially for second-generation immigrants from non-EU countries), and (2) proficiency in the host country language, citizenship acquisition, and (to a lesser extent) duration of residence for first-generation immigrants. Finally, estimates suggest that around a decade is needed for the employment gap between refugees and other foreign-born workers to be (largely) suppressed.
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Notes
Regarding neighbouring countries, while the employment rate among foreign-born individuals is the same in France as in Belgium, it is significantly higher in the Netherlands (67%) and in Germany (71%). Conversely, the employment gap with respect to natives is more similar between those countries (7% points in Germany, 8% points in France and Belgium, and 14% points in the Netherlands). The United Kingdom is a country combining a high employment rate and almost no gap with respect to natives.
EU-14, Other EU countries, EU candidate countries, Other European countries, The Maghreb, Other African countries, The Near and Middle East, The Far East and Oceania, Other Asian countries, North America, Central and South America.
Rather than focusing on employment, most articles in the literature have estimated the impact of naturalisation on immigrant wages. The evidence for a citizenship wage premium is mixed, with some articles suggesting a significant positive effect, while others do not (see e.g. Bratsberg and Raaum, 2011 and Helgertz et al., 2014). In a recent article, Peters et al. (2020) offer some theoretical explanations for this ambiguity and test their validity using information on almost all registered first-generation immigrants who migrated to the Netherlands between 1999 and 2002 for a period of 10 years. Their estimates reveal a modest one-off increase in the earnings of immigrants from less developed countries and unemployed immigrants after naturalization. Moreover, they show that the increase in immigrant earnings is more pronounced before than after naturalisation. These results suggest that immigrants anticipate the acquisition of citizenship by investing in their own human capital and thus improving their labour market performance before naturalisation. Overall, the authors thus conclude that naturalisation has a significant effect on immigrant wages but that this effect is not universal and that most of this effect occurs before obtaining citizenship.
Analysing the 2015 PISA results for Belgium, Danhier and Jacobs (2017) emphasise the low level of equity in terms of origin in the Belgian schooling system, one of the lowest among industrialised and democratic countries.
Interestingly, De Cuyper et al. (2018) also find some evidence suggesting that workplace and job-searching attitudes training is associated to relatively better exit rates to employment for second-generation immigrants. This outcome is in line with an earlier study for Flanders undertaken by Vandermeerschen et al. (2017).
To identify the level of education, the Crossroads Bank for Social Security uses information supplied by the public employment services (Actiris, ADG, Forem, VDAB). This implies that the level of education is only recorded when the person in question has already experienced unemployment during the period under study (2008–2014). That only applies to 36% of the people covered in the database. To avoid this limitation, we have chosen to rely on the level of education recorded in the 2008 and 2014 LFS ad hoc modules, which is available for all surveyed individuals. It should be noted that information on the level of education in the LFS is self-declared and therefore does not necessarily correspond to that recognised by the Belgian authorities. The highest educational attainment is determined using the International Standard Classification of Education (ISCED): at most lower secondary education corresponds to ISCED levels 0 to 2, higher secondary education corresponds to ISCED level 3 to 5 and tertiary education to ISCED level 5 or above.
3740 individuals for whom the country of birth of at least one of their parents was missing have been dropped. This reduced our initial sample by 7.6%.
For a detailed description of country categories see “Appendix 1” in Piton and Rycx (2020).
This choice stems from the fact that: (1) children born in Belgium before 1st June 2014 were named after their father (since then, the legislation has become more flexible) and (2) correspondence studies have shown that callback rates depend upon the origin of job seekers’ names (Baert & Vujic, 2016; Baert et al., 2017; Biaraschi et al., 2017; Zschirnt and Ruedin, 2016).
While this is true in most EU countries (with the exception of e.g. Portugal, Ireland and the United Kingdom), the difference is particularly significant in Belgium. According to EU LFS statistics, the proportion of low-educated immigrants is almost 17% points higher than the proportion of low-educated natives in Belgium, which is the fifth largest gap among EU countries (behind Germany, Sweden, France and Finland).
Descriptive statistics for the whole population are obtained from the CBSS.
In the CBSS, educational attainments are only available for a small fraction of the population (see footnote 8). Hence, descriptive statistics from the CBSS relative to the level of education should be considered with caution.
Average marginal effects have been computed. Moreover, cluster-robust standard errors are presented between parentheses. For this purpose, we rely on the option ‘vce(cluster clustvar)’ in Stata 16, which specifies that the standard errors allow for intragroup correlation, relaxing the usual requirement that the observations be independent. That is to say, the observations are independent across groups (clusters) but not necessarily within groups. Clustering is performed at the individual (i.e. worker) level.
Estimates reported in italics in Table 3 are based on data for less than 35 individuals (i.e. 35 individuals * 4 quarters * 7 years = 980 individual-quarter-year observations). Due to micronumerosity, these estimates are likely to be misleading and should thus not be interpreted. The same comment applies to all other tables in this manuscript.
Note that our results might underestimate the employment gap between first-generation immigrants born in the EU-27 and those born outside the EU since people working for international organisations (e.g. NATO or the European Union) are recorded as inactive in the data from the BCSS (they do not pay taxes and are thus not registered as workers in administrative data). For the same reason, the penalty associated with first-generation immigrants born in North America is likely to be overestimated in column (2).
These results have been compared with those reported by the High Council for Employment (2018), which estimated ceteris paribus the employment penalty of people born outside the EU compared with those born in Belgium (independently of whether the parents of those people were born in Belgium or abroad). As expected, this comparison shows that pooling natives and second-generation immigrants together leads to underestimation of the true employment penalty for almost all categories of first-generation immigrants born outside the EU (i.e., people born in the Maghreb, other African countries, EU candidate countries, other Asian countries, the Far East and Oceania, and South and Central America) with respect to natives. At the same time, we find that ceteris paribus the employment penalty for first-generation immigrants from the Near and Middle East, other European countries and North America with respect to natives is over-estimated when pooling natives and second-generation immigrants together.
To define the origin of second-generation immigrants, we relied so far on the father’s country of birth, except if the father was born in Belgium and the mother abroad. In that case, the mother’s country of birth was retained (see Sect. 4). Although quite standard, the validity of this approach may be discussed. Therefore, in a robustness test, we re-estimated Eq. (1) using an alternative approach to define second-generation immigrants’ origin. The latter is based on the employment rate by country of birth in Belgium in 2014 (as computed by the FPS Employment and Unia (2017) using exhaustive population data). More precisely, it prioritizes the country of birth of the parent (father or mother) with the lowest employment rate. The employment rate by country of birth in Belgium in 2014 was, from the lowest to the highest: (1) the Near or Middle East, (2) other European countries, (3) other African countries, (4) the Maghreb, (5) EU candidate countries, (6) other Asian countries, (7) the Far East or Oceania, (8) South or Central America, (9) North America, (10) other EU countries, (11) EU-14, (12) Belgium. Accordingly, the origin of a second-generation immigrant whose mother was born in the Near or Middle East and whose father was born, for instance, in the Maghreb, will correspond to the mother’s country of birth. Estimates based on this alternative approach, available on request, leave our conclusions unaffected. Indeed, they corroborate the results reported in Table 3, both in terms of significance and magnitude.
By ‘double penalty’, we mean that the penalty of immigrant women of EU origin corresponds to the sum of the penalty faced respectively by women and immigrants of EU origin.
Yet, these potential explanations should be taken with caution as they are not explicitly tested in our setup.
As tertiary-educated natives (the reference category in column 4) have a significantly higher employment rate than their less educated counterparts.
More disaggregated results (in columns 2 and 4) further show that the pattern is quite heterogeneous depending on the country of birth of the workers. For example, while among those born in the Near and Middle East, the penalty is lower for the highly educated, the opposite result is observed for those born in other European countries.
This group accounts for 72% of second-generation immigrants in our database. 11% have both parents born in another EU country, 16% have both parents born outside the EU and 1% have one parent born in the EU and the other born outside the EU.
We do not discuss the penalty for second-generation immigrants with one parent born in the EU-27 and the other outside the EU as it has been estimated on quarterly data relative to less than 35 individuals (and is thus reported in italics in Table 6). See also footnote 26, which points out that the incidence of mixed couples where one parent is born in the EU-27 and the other outside the EU is very low in Belgium.
Complementary regressions have been run to test the relevance of the mother’s and father’s countries of birth for second-generation immigrants with two foreign-born parents. The results, available on request, again suggest that the second generation’s employment penalty is not substantially affected by this moderating variable. Yet, they should be taken with great caution due to micronumerosity. Only 19 people in our sample have one parent born in the EU-27 and the other outside the EU. The number of second-generation immigrants with a mother born in the EU-27 and a father outside the EU (and vice versa) is thus too small to draw reliable conclusions. This feature is reflective of a general phenomenon in Belgium, namely that second-generation immigrants from mixed couples with one parent born in the EU-27 and the other outside the EU are very uncommon (see descriptive statistics, based on exhaustive population data, in FPS Employment and Unia (2020)).
Cohort effects are at least partially accounted for by the inclusion of age dummies.
More precisely, when comparing immigrants with more than 10 years of residence in Belgium to those who have been living in the country for at most 10 years.
Particularly, the lower bound of the first duration category.
According to Eurostat, on average over the period, nearly 3% of foreigners acquired Belgian nationality every year compared with an average of 2.6% acquiring the host country’s nationality in EU countries.
The Belgian Nationality Code, created in 1984, has been subject to several reforms. Before 2000, candidates had to be between 18 and 30 years of age, born in Belgium and having their main residence in Belgium to become Belgian citizens by making a declaration. Since 1991, the Code enables children born in Belgium from parents who were themselves born in Belgium to obtain the Belgian nationality. The 2000 reform, known as the ‘Snel Belg wet’, greatly eased the criteria for acquiring the Belgian nationality. The age limit of 30 years has been abolished. Moreover, the Belgian nationality could be obtained in the three following situations: (a) being born in Belgium and having the main residence in Belgium since birth, (b) being born abroad and having one parent with the Belgian nationality at the time of the declaration, (c) being resident in Belgium for 7 years and having an unlimited right of residence. In 2013, the Code was amended again, but this time the criteria for acquiring the nationality were tightened up. At present, foreigners have to fulfil the following conditions in order to be able to acquire the Belgian nationality: (1) be at least 18 years of age, (2) know at least one of the three national languages, (3) provide evidence of social integration, (4) being Belgian resident for: (a) 5 years if: they have worked for at least 468 days,—are married to a Belgian, or—have a disability preventing them from working; or (b) 10 years if none of the preceding three conditions is satisfied.
The share of first-generation immigrants born with a nationality from the EU-27 (from outside the EU), stands at 9% (10%) in our data set. Among those, 2% (7%) acquired Belgian nationality.
This feature is also confirmed by descriptive statistics, based on exhaustive population data, reported in FPS and Unia (2017).
Despite Belgian’s quite liberal naturalisation policy over most of the sampling period and our control for immigrants’ duration of residence (two factors likely to reduce reverse causality), our estimates should not be interpreted as causal but instead as strong support in favour of a significant citizenship premium.
The estimates of the citizenship premium for more detailed groups of first-generation immigrants are available on request. They deliver a consistent message.
While nationals of the Schengen Area and the European Economic Area (EEA, i.e. EU + Iceland, Norway and Liechtenstein) enjoy freedom of movement, people from third countries generally need a visa in order to cross the border. Various legal reasons may be stated for this purpose. They include applications for international protection, entry in order to take up a job, applications for family reunification, or migration for the purpose of studying. The type of residence permit and work permit granted varies according to the stated purpose. Appendix 3 summarises the main rules and conditions for each reason for immigration.
Employment-related immigrants in our dataset include both those that found a job in Belgium prior to migration and those that did not.
About 20% of immigrants born outside the EU declared another (unspecified) motive in the LFS. This figure reaches 32% among immigrants born in the EU-27.
Over the period 2008–2016, Belgium issued proportionately more permits for family reasons (47%), but also for humanitarian reasons and for international protection (24%), compared to the European average (28% and 10% respectively). Conversely, proportionally fewer people came for study (11% of permits issued in Belgium compared to an average of 20% in EU countries), and far fewer for economic reasons (9% compared with 26%) (High Council for Employment, 2018).
More detailed descriptive statistics, not reported here due to space constraints, are available on request.
As footnote 17 points out, people working for international organisations (e.g. NATO or the European Union) are recorded as inactive in our data. Therefore, our estimates should be interpreted with this limitation in mind. In particular, the employment gap for economic migrants may therefore be overestimated.
This is due in particular to the fact that Article 17 of the Royal Decree on Foreign Workers specified that refugees were not allowed to work during their first 6 months of residence in Belgium. The Federal Government reduced this period from 6 to 4 months in October 2015.
Information on immigrants’ skills in the host country language is taken from the 2014 LFS ad hoc module. More precisely, we relied on LANGHOST, a self-declared variable on immigrants’ degree of command of one of the host country languages. This categorical variable has five possible outcomes: (a) language is mother tongue, (b) advanced, (c) intermediate, (d) beginner or less skills, (e) no response. Given that there are three official languages in Belgium, immigrants’ host language proficiency refers to their skills in at least one of those languages. However, the variable does not identify which official language it refers to.
The gains are estimated at between 3 and 4% points for immigrants born respectively in the EU-14 and in other EU countries. The smaller benefits for those immigrants might notably be explained by: i) their better knowledge of another commonly used language for doing business (e.g. English), and ii) their over-representation (especially for those born in other EU countries) in jobs and sectors where required host language skills are less demanding, e.g. cleaning and construction.
The full set of estimates for immigrants whose mother tongue corresponds to that of their destination country, not reported here due space constraints, is available on request. Robustness tests, splitting immigrants according to whether they had at most intermediate skills or at least advanced skills, have also been performed. The results, available on request, back up our conclusions.
Corluy et al. (2011) only find a significant citizenship premium, of around 4.1% points, for non-Western immigrants (i.e. those originating from EU candidate countries (mainly Turkey), North African countries (mainly Morocco), Sub-Saharan African countries, South America and Asia). For Western immigrants (i.e. those originating from the EU-27 and North America), their estimates suggest that citizenship acquisition does not play a significant role. The difference between the findings of Corluy et al. (2001) and our results might be due to the fact that Corluy et al. (2011) did not distinguish between second-generation immigrants and the children of native-born parents, and that they relied on data for the year 2008 only.
The single permit system was introduced in Belgium in January 2019. Applications must be submitted first to the regional authorities and then, if successful, transferred to the federal immigration authorities. The single permit system also introduced changes for dependents, given that they are now granted unlimited access to the labour market without the need to apply for a work permit (OECD, 2020).
This recommendation is supported by complementary descriptive statistics on employment gaps by origin, gender and household characteristics provided by FPS Employment and Unia (2017). Yet, as our data set provides no direct information on the use of childcare facilities by mothers of different origins, this recommendation should be viewed with caution.
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Acknowledgements
We are grateful to the National Bank of Belgium (NBB) for their financial support. The views expressed in this manuscript are our own and do not necessarily reflect those of the NBB.
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Appendices
Appendix 1: Distribution of people by origin (entire population aged 30–64 over the period 2008–2014)
Variables | |
|---|---|
Natives | 0.718 |
Second-generation immigrants | 0.093 |
EU-27 | 0.071 |
EU-14 | 0.067 |
Other EU country | 0.003 |
Outside the EU | 0.022 |
The Near or Middle East | 0.000 |
Other European country | 0.002 |
Other African country | 0.005 |
The Maghreb | 0.009 |
EU candidate country | 0.004 |
Other Asian country | 0.000 |
The Far East or Oceania | 0.000 |
South or Central America | 0.000 |
North America | 0.001 |
First-generation immigrants | 0.190 |
EU-27 | 0.083 |
EU-14 | 0.066 |
Other EU country | 0.016 |
Outside the EU | 0.107 |
The Near or Middle East | 0.007 |
Other European country | 0.013 |
Other African country | 0.023 |
The Maghreb | 0.032 |
EU candidate country | 0.014 |
Other Asian country | 0.006 |
The Far East or Oceania | 0.005 |
South or Central America | 0.005 |
North America | 0.002 |
Number of individual-year observations | 36,475,905 |
Appendix 2 Descriptive statistics according to workers’ origin (entire population aged 30–64 over the period 2008–2014)
Variables | Natives | Second-generation immigrants | First-generation immigrants | ||
|---|---|---|---|---|---|
EU-27 | Outside the EU | EU-27 | Outside the EU | ||
Employed | 0.717 | 0.678 | 0.653 | 0.484 | 0.455 |
Women | 0.499 | 0.489 | 0.493 | 0.505 | 0.490 |
Age categories (years) | |||||
30–34 | 0.121 | 0.142 | 0.416 | 0.144 | 0.191 |
35–39 | 0.128 | 0.157 | 0.266 | 0.146 | 0.193 |
40–44 | 0.145 | 0.171 | 0.155 | 0.151 | 0.176 |
45–49 | 0.160 | 0.166 | 0.072 | 0.150 | 0.150 |
50–54 | 0.159 | 0.150 | 0.039 | 0.144 | 0.127 |
55–59 | 0.148 | 0.125 | 0.029 | 0.135 | 0.098 |
60–64 | 0.139 | 0.089 | 0.023 | 0.129 | 0.064 |
Highest attained education | |||||
At most lower secondary education | 0.324 | 0.410 | 0.353 | 0.455 | 0.568 |
Higher secondary education | 0.323 | 0.340 | 0.354 | 0.211 | 0.129 |
Tertiary education | 0.353 | 0.250 | 0.291 | 0.334 | 0.303 |
Region of residence | |||||
Brussels | 0.043 | 0.086 | 0.304 | 0.266 | 0.340 |
Flanders | 0.656 | 0.347 | 0.374 | 0.379 | 0.417 |
Wallonia | 0.302 | 0.568 | 0.322 | 0.355 | 0.242 |
Number of individual-year observations | 26,172,616 | 3,019,036 | 3,891,538 | 2,580,308 | 812,407 |
Appendix 3: Immigration rules in Belgium, according to the reason for immigration, for persons who are not nationals of the Schengen Area or the European Economic Area
Residence permit | Work permit | |||
|---|---|---|---|---|
Type | Conditions | Type | Conditions | |
Economic migrants | Short- or long-stay visa depending on the duration of the employment contract | Conditional upon the grant of a work permit | Type-B work permit limited to work for a single employer and valid for 12 months maximum. Permit renewable in the branch of activity for which it was granted Type-A work permit, unlimited and valid for all salaried occupations subject to 4 years of work under a type-B permit over a maximum period of 10 years’ residence | Only if no-one can be found among the workers present on the labour market, and only if the person comes from a country with which an agreement has been signeda Application made by the future employer Under certain conditions, in the case of highly educated migrants the labour market analysis and the condition concerning an agreement with the country of origin are waived |
International protection | Long-stay visa for 5 years renewable for a permanent residence permit if the person still qualifies for international protection status | Must have refugee status defined in the 1951 Geneva Conventionb | Type-C work permit valid for all salaried occupations for a maximum of 12 months renewable A work permit is no longer necessary once residence becomes permanent | Authorisation to work 4 months after submission of the asylum application or if the application is accepted and the person is granted a residence permit |
Family reunification | 3-year long-stay renewable. Access to unlimited residence after 5 years in Belgium Residence is terminated if the family reunification migrant no longer fulfils the conditions | Only spouse and/or children (or parents if the applicantc is an unaccompanied minor) The applicantc must hold an unlimited residence permit and have stable and sufficient means of subsistence | Type-C work permit valid for all salaried occupations for a maximum of 12 months A work permit is no longer necessary once residence becomes permanent | Conditional upon the grant of a valid residence permit |
Study | Short or long-stay visa depending on the length of the course and/or apprenticeship. Expires once the course is completed. May be withdrawn if the person fails to attend examinations or if the studies are excessively prolonged | Requires proof of registration, sufficient means of subsistence, a medical certificate and a certificate of good conduct | Type-C work permit valid for any work outside the academic vacations, valid for 12 months maximum No permit needed for work during the academic vacations | Job must not exceed 20 h per week |
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Piton, C., Rycx, F. A Broken Social Elevator? Employment Outcomes of First- and Second-Generation Immigrants in Belgium. De Economist 169, 319–365 (2021). https://doi.org/10.1007/s10645-021-09385-2
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DOI: https://doi.org/10.1007/s10645-021-09385-2