Novel data on integration and migration in the Nordic Statistics database calls for yet another article on this topic, this time with focus on the labour market perspective. In this article we learn that participation in the Nordic labour market differs between population groups, and that the employment rate is lower among foreign-born than in the rest of the population. The employment rate generally increases with time spent in the country, although this is not true for all the Nordic countries.

In the summer of 2024, 12 matrices on immigration and migration were updated in the Nordic Statistics database. Data can be found here. On November 1^st, the first article in a series on the topic was published. It focused on the demographics in the Nordics, comparing different aspects for Foreign-born (foreign-born with two foreign-born parents), Descendants (native-born with two foreign-born parents) and the Rest of the population [1]. Now, we continue by focusing on the labour market.

Overview of the labour market

The employment rate is calculated by dividing the number of working individuals by the population. This can be calculated for any relevant age group and sub-population. In this context, we examine the employment rate among Foreign-born, their Descendants and the Rest of the population.

Comparing the employment rate for these three population categories in the Nordic countries, we can see that a pattern emerges. Namely, that the employment rate is lowest in the Foreign-born group in all countries, whereas the highest rates are found in the Rest of the population category.

Ther largest differences in employment rates between the Foreign-born group and Rest of the population are seen in  Finland and Sweden, a difference by 17 percentage points. The smallest difference in employment rates between these two groups is seen in Norway, with a difference of 12 percent. Interestingly, in Finland, the employment rate among Foreign-born and Descendants are almost equal.

Source: Nordic Statistics database, WORK30

If we continue by looking at the inactive population aged 20-29 years, we can see a reverse pattern compared to the employment rates. The proportion of the population that does not work or study is highest in the Foreign-born group in all countries, and lowest in the Rest of the population category. The highest share of inactive population for all three categories are seen in Finland.

Source: Nordic Statistics database, LABO30

Foreign-born

In this section we focus on the labour market situation among Foreign-born with two foreign-born parents. If we begin by studying the employment rate for this group over time, we can see that the general trend has been positive. All countries witnessed a decrease in the pandemic year of 2020 (Sweden has missing data for 2020 at the time for publishment of this article). The trend has been positive in Finland as well, apart from 2020, but the gap between Finland and the other Nordic countries has increased.

Source: Nordic Statistics database, WORK30

As mentioned in the beginning of the article, the employment rate can be calculated for various sub-populations. In the following graph, the employment rate among foreign-born is presented based on Length of stay, the number of years that they have lived in the reporting Nordic country. It is intuitive to think that the employment rate is higher among foreign-born who have lived in the country for a longer period, and this is true for Sweden. There, the employment rate is consecutively higher the longer the stay in the country. In Finland, this is also the general pattern, with the exception of a slightly lower employment rate for foreign-born who have stayed in the country 4-7 years, compared to those who have stayed 0-3 years. In both Denmark and Norway however, the employment rate is higher among foreign-born that have lived in the country for 8-15 years than in the group that has lived there for More than 15 years.

Source: Nordic Statistics database, WORK31

For employment rate by Reason for residence permit among foreign-born, data is available for Norway and Sweden. Reasonably enough, in both countries the employment rate is highest in the group who obtained a residence permit with Labour, Education or Other as their primary reason. [2]

In Norway, the rate is lowest for the combined group Refugees (granted asylum or residence permit on humanitarian grounds, as a resettlement refugee, or as a person who belongs to a group with collective protection) and Family – refugees (granted residence permit as close family member reuniting, accompanying or forming a family with a refugee in the host country). The difference compared to the group Family – other (granted residence permit as close family member reuniting, accompanying or forming a family with a person who is not a refugee in the host country) is 10 percentage points, and the total span of the differences in rates between the three groups is 20 percentage points.

In Sweden, the groups Refugees and Family-refugees and Family – Other have the same employment rate, and the total difference between the three groups is smaller, the total span being 10 percentage points.

Source: Nordic Statistics database, WORK32

Descendants

As we learned in previous sections, the employment rate is higher among Descendants than in the Foreign-born population. Focusing solely on the employment rate among Descendants, we can see that it has been highest in Sweden during the period 2016-2021 (although values for 2020 are missing). The employment rate decreased in Denmark, Norway and Finland during the pandemic year of 2020. In Denmark and Norway, the employment rate increased again in 2021, above pre-pandemic levels. In Finland, the employment rate was still below pre-pandemic levels in 2021.

Source: Nordic Statistics database, WORK30

If we examine the gender difference in employment rates in the Descendants group, we see that the employment rate is higher among Women in all four Nordic countries. This means that there is a gender difference between these population groups, where native-born women with two foreign-born parents are more integrated in the Nordic labour market than their male counterparts.

When compared with the Rest of the population group, we can see that employment rates are higher among Men in all the Nordic countries except for Finland. The largest difference between the genders in this group can be seen in Norway and Denmark, a difference by 4 percentage points. There is thus a reversed pattern in employment rate between Men and Women in these two population groups.

Source: Nordic Statistics database, WORK30

Source: Nordic Statistics database, WORK30

Stay tuned for an additional article on the topic of the new integration and migration data, where the educational perspective will be covered.

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[1] Foreign-born are defined as being foreign-born with two foreign-born parents (foreign-born with native-born adoptive parents excluded). Descendants are defined as native-born with two foreign-born parents, and Rest of the population refers to the rest of the population excluding descendants and foreign-born with two foreign-born parents. For more extensive definitions, please consult the footnotes-section in the source matrices.

[2] Definitions of Reason for Recidence Permit:

• Refugee: Granted asylum or residence permit on humanitarian grounds, as a resettlement refugee, or as a person who belongs to a group with collective protection.
• Family - refugees: Granted residence permit as close family member reuniting, accompaning or forming a family with a refugee in the host country.
• Family - other: Granted residence permit as close family member reuniting, accompaning or forming a family with a person who is not a refugee in the host country.
• Labour: Primary reason for residence permit is labour.
• Education: Primary reason for residence permit is education.
• Other: Granted residence for all other reasons.