While most previous research on immigrants’ assimilation refers to the residual disadvantage that remains in empirical analyses of economic outcomes as a general ‘ethnic penalty’, this current paper disentangles the ‘ethnic penalty’ by dividing it into four components: individual characteristics, country characteristics, the social environment in host country, and the policy environment in host country. This study tests the effects of these four components on three economic outcomes: employment, labor force participation, and household income. Data from the European Social Survey, the Migrant Integration Policy Index, the UN, and the World Bank are integrated here. Findings show that the main reasons for immigrants’ disadvantage in terms of labor force participation and household income are both origin and host country characteristics, while the effects of ethnic origins, social exclusion, and policies are weaker. However, ethnic origins and social exclusion actually play a central role in determining unemployment of immigrants.
This is a preview of subscription content, access via your institution.
Buy single article
Instant access to the full article PDF.
Tax calculation will be finalised during checkout.
Subscribe to journal
Immediate online access to all issues from 2019. Subscription will auto renew annually.
Tax calculation will be finalised during checkout.
Note that there is a problem with comparing coefficients across non-linear models with different independent variables. This is because the unobserved heterogeneity is likely to vary across models as discussed, for example, in the papers of Mood (2010) and Karlson et al. (2012), and several others (see: Allison 1999; Long and Freese 2006; Menard 2011; Williams 2009). Indeed, unlike OLS regressions, the binary dependent variable Y changes its scale in different contexts due to the unobserved residue in the equation.
Some scholars solve this problem by focusing on the average marginal effect (AME). However, this approach cannot be applied where the variable in focus is nominal with multiple levels as it is in this study where the variable in focus is ethnicity. Alternatively, Karlson et al. (2012) have developed the KHB package for STATA. However, this package cannot be applied for ‘xtmelogit’ models. In addition, there is a problem to deal with this issue where both fixed and random effects are at play.
Therefore, I took two other measures in order to address this issue. The first is to follow Mood (2010) in her recommendation to standardize the dependent variable. She suggests that coefficients can be made comparable across models by dividing them with the estimated standard deviation of the latent variable for each model (y-standardization). While this procedure should not apply to comparisons of different groups, it is applicable to comparisons across models estimated on the same sample because one can know the size of the difference in unobserved heterogeneity across models. This procedure produced very similar results to the ones presented and these alternative tables are available upon request.
In addition, the results presented in Table 1, where the household income is the dependent variable in a continuous form, were compared to results where the household income is binary (above/below the median). In this way, one can know if there are significant differences between linear and non-linear estimations. Such comparison shows that the results are very similar. This strengthens the argument that, at least in regards to household income, the bias here is small enough and does not affect the conclusions of this study. Indeed, out of the three economic outcomes examined in this paper, the household income is the only one that can be transformed into a continuous variable. Yet in light of this comparison, there is also less room to suspect that the two other logit models (Tables 2, 3) would have been different by much if estimated without the aforementioned problem of non-linear models. All results and further elaboration on this topic are available upon request from the author.
Aigner, D., & Cain, G. (1977). Statistical theories of discrimination in labor markets. Industrial and Labor Relations Review, 30(2), 175–187.
Alba, R., & Nee, V. (1997). Rethinking assimilation theory for a new era of immigration. International Migration Review, 31(4), 826–874.
Alba, R., & Nee, V. (2005). Remaking the American mainstream: Assimilation and contemporary immigration. Cambridge: Harvard University Press.
Allison, P. D. (1999). Comparing logit and probit coefficients across groups. Sociological Methods and Research, 28(2), 186–208.
Antecol, H. (2000). An examination of cross-country differences in the gender gap in labor force participation rates. Labour Economics, 7(4), 409–426.
Arrow, K. (1973). The theory of discrimination. Discrimination in Labor Markets, 3(10), 3–33.
Becker, G. S. (1971). The economics of discrimination. Chicago: University of Chicago Press.
Berry, J. W. (1997). Immigration, acculturation, and adaptation. Applied Psychology: An International Review, 46(1), 5–68.
Bogardus, E. (1933). A social distance scale. Sociology and Social Research, 22, 265–271.
Bollinger, C. R. (2003). Measurement error in human capital and the black–white wage gap. Review of Economics and Statistics, 85(3), 578–585.
Borjas, G. (1987). Self-selection and the earnings of immigrants. The American Economic Review, 77(4), 531–553.
Borjas, G. (1988). International differences in the labor market performance of immigrants. Kalamazoo, MI: W.E. Upjohn Institute for Employment Research.
Borjas, G. (1990). Friends or strangers: The impact of immigrants on the US economy. New York: Basic Books.
Borjas, G. (1995). Assimilation and changes in cohort quality revisited: What happened to immigrant earnings in the 1980s? Journal of Labor Economics, 13(2), 201–245.
Bursell, M. (2012). Ethnic discrimination, name change and labor market inequality: Mixed approaches to ethnic exclusion in Sweden. Stockholm: Acta Universitatis Stockholmiensis.
Chiswick, B. (1978). The effect of americanization on the earnings of foreign-born men. The Journal of Political Economy, 86(5), 897–921.
Chiswick, B. (1979). The economic progress of immigrants: Some apparently universal patterns. In W. Fellner (Ed.), Contemporary economic problems (pp. 357–399). Washington, DC: American Enterprise Institute.
CIA. (2013). Distribution of family income—Gini Index. Washington, DC: C. I. Agency.
Cobb-Clark, D. A. (1993). Immigrant selectivity and wages: The evidence for women. American Economic Review, 83(4), 986–993.
Cohen, Y. (1996). Economic assimilation in the united states of arab and jewish immigrants from israel and the territories. Israel Studies, 1(2), 75–97.
Collett, E., & Petrovic, M. (2014). The future of immigrant integration in Europe: Mainstreaming approaches for inclusion. Brussels: Migration Policy Institute Europe.
De-Beijl, R. Z. (2000). Documenting discrimination against migrant workers in the labour market: A comparative study of four European countries (Vol. 1). Geneva: International Labour Organization.
Eldridge, H. (1964). A cohort approach to the analysis of migration differentials. Demography, 1(1), 212–219.
Fielding, A., & Goldstein, H. (2006). Cross-classified and multiple membership structures in multilevel models: An introduction and review (Vol. 69). Birmingham: University of Birmingham.
Filindra, A., Blanding, D., & Coll, C. G. (2011). The power of context: State-level policies and politics and the educational performance of the children of immigrants in the United States. Harvard Educational Review, 81(3), 407–438.
Fleischmann, F., & Dronkers, J. (2010). Unemployment among immigrants in European labour markets: An analysis of origin and destination effects. Work, Employment and Society, 24(2), 337–354.
Gans, H. (1992). Second-generation decline: Scenarios for the economic and ethnic futures of the post 1965 American immigrants. Ethnic and Racial Studies, 15(2), 173–192.
Goldstein, H. (2005). Multilevel models. In: P. Armitage, T. Colton (Eds.), Encyclopedia of biostatistics (pp. 2725–2731). Chichester, UK: Wiley. doi:10.1002/0470011815.b2a09031.
Gordon, M. M. (1964). Assimilation in American life: The role of race, religion, and national origins. Oxford: Oxford University Press.
HDI. (2013). Human development index. New York: Human Development Report Office, the United Nation. (http://hdr.undp.org/en/statistics/)
Heath, A. (2007). Crossnational patterns and processes of ethnic disadvantage. In A. Heath & S. Y. Cheung (Eds.), Unequal chances: Ethnic Minorities in western labour markets. Oxford: British Academy, Oxford University Press.
Heath, A., & Cheung, S. Y. (2006). Ethnic penalties in the labour market: Employers and discrimination. Leeds: Department for Work and Pensions.
Heath, A., & Cheung, S. Y. (Eds.). (2007). Unequal chances: Ethnic minorities in western labour markets. Oxford: Oxford University Press.
Heath, A., Rothon, C., & Kilpi, E. (2008). The second generation in Western Europe: Education, unemployment, and occupational attainment. Annual Review of Sociology, 34, 211–235.
Heckman, J. J. (1998). Detecting discrimination. The Journal of Economic Perspectives, 12(2), 101–116.
Heckman, J. J., Lyons, T. M., & Todd, P. E. (2000). Understanding black–white wage differentials, 1960–1990. The American Economic Review, 90(2), 344–349.
Huddleston, T., Bilgili, O., Joki A. L., Vankova, Z. (2015). Migrant integration policy index. Barcelona/Brussels: CIDOB and MPG.
Huijts, T., & Kraaykamp, G. (2012). Immigrants’ health in Europe: A cross-classified multilevel approach to examine origin country, destination country, and community effects. International Migration Review, 46(1), 101–137.
Irwin, S., & Bottero, W. (2000). Market returns? Gender and theories of change in employment relations. The British Journal of Sociology, 51(2), 261–280.
Jonsson, J. O. (2007). The farther they come, the harder they fall? First and second generation immigrants in the Swedish labour market. In A. Heath & S. Y. Cheung (Eds.), Unequal chances: Ethnic minorities in western labour markets. Oxford: British Academy, Oxford University Press.
Just, A., Sandovici, M. E., & Listhaug, O. (2014). Islam, religiosity, and immigrant political action in Western Europe. Social Science Research, 43, 127–144.
Karlson, K. B., Holm, A., & Breen, R. (2012). Comparing regression coefficients between same-sample nested models using logit and probit a new method. Sociological Methodology, 42(1), 286–313.
Kivisto, P. (1990). The transplanted then and now: The reorientation of immigration studies from the Chicago School to the new social history 1. Ethnic and Racial Studies, 13(4), 455–481.
Kline, R. B. (2011). Principles and practice of structural equation modeling. New York: Guilford press.
Kogan, I. (2006). Labor markets and economic incorporation among recent immigrants in Europe. Social Forces, 85(2), 697–721.
Kymlicka, W., & Banting, K. (2006). Immigration, multiculturalism, and the welfare state. Ethics and International Affairs, 20(3), 281–304.
LaPiere, R. T. (1934). Attitudes vs. actions. Social Forces, 13(2), 230–237.
Long, J. S., & Freese, J. (2006). Regression models for categorical dependent variables using Stata. Texas: Stata Press.
Maliepaard, M., & Phalet, K. (2012). Social integration and religious identity expression among Dutch muslims the role of minority and majority group contact. Social Psychology Quarterly, 75(2), 131–148.
Menard, S. (2011). Standards for standardized logistic regression coefficients. Social Forces, 89(4), 1409–1428.
Model, S., & Lin, L. (2002). The cost of not being Christian: Hindus, Sikhs and Muslims in Britain and Canada. International Migration Review, 36(4), 1061–1092.
Mood, C. (2010). Logistic regression: Why we cannot do what we think we can do, and what we can do about it. European Sociological Review, 26(1), 67–82.
Morissens, A., & Sainsbury, D. (2005). Migrants’ social rights, ethnicity and welfare regimes. Journal of Social Policy, 34(4), 637.
Neumark, D. (2012). Detecting discrimination in audit and correspondence studies. Journal of Human Resources, 47(4), 1128–1157.
Park, R. E., & Miller, H. A. (1921). Old world traits transplanted. New York: Harpers and Brothers publishers.
Phelps, E. S. (1972). The statistical theory of racism and sexism. The American Economic Review, 62(4), 659–661.
Portes, A., & Rumbaut, R. G. (2006). Immigrant America: A portrait. Berkeley: University of California Press.
Portes, A., & Zhou, M. (1993). The new second generation: Segmented assimilation and its variants. The annals of the American academy of political and social science, 530(1), 74–96.
Rydgren, J. (2004). The logic of xenophobia. Rationality and Society, 16(2), 123–148.
Safi, M. (2010). Immigrants’ life satisfaction in Europe: Between assimilation and discrimination. European Sociological Review, 26(2), 159–176.
Sainsbury, D. (2006). Immigrants’ social rights in comparative perspective: Welfare regimes, forms in immigration and immigration policy regimes. Journal of European Social Policy, 16(3), 229–244.
Silberman, R., & Fournier, I. (2009). Second generations on the job market in France: A persistent ethnic penalty. Revue française de sociologie, 49(5), 45–94.
Snijders, T. A. B. (2011). Multilevel analysis. In M. Lovric (Ed.), International encyclopedia of statistical science. Berlin: Springer.
Van Tubergen, F., Maas, I., & Flap, H. (2004). The economic incorporation of immigrants in 18 Western societies: Origin, destination, and community effects. American Sociological Review, 69(5), 704.
Williams, R. (2009). Using heterogeneous choice models to compare logit and probit coefficients across groups. Sociological Methods and Research, 37(4), 531–559.
World-Bank. (2013). Gini Index. Washington, DC: W. Bank.
Zhou, M. (1997). Segmented assimilation: Issues, controversies, and recent research on the new second generation. International Migration Review, 31(4), 975–1008.
See Table 4.
About this article
Cite this article
Kislev, E. Deciphering the ‘Ethnic Penalty’ of Immigrants in Western Europe: A Cross-Classified Multilevel Analysis. Soc Indic Res 134, 725–745 (2017). https://doi.org/10.1007/s11205-016-1451-x
- Western Europe
- Ethnic penalty
- Labor markets