In this section we investigate whether the combination of home and destination-country human capital matters for immigrants’ employment status. Employment status is measured in 2006 to be able to utilise information on immigrant characteristics, especially language proficiency, from the survey. The descriptive statistics in table 6.1 showed that 61% of the immigrants are categorised as employed (either wage-earner or self-employed).
Table 6.6 shows results from three logit models for employment status, following the step-wise model design described in Box 1: Model I is a model with the base set of pre-migration characteristics, model II adds to this language proficiency and language proficien-cy interacted with home-country education and model III adds to model I destination-country qualifications.
Table 6.6 Employment status in 2006. Logit models for being employed. Marginal effects
Baseline model (I) Destination-country language proficiency model (II)
Destination-country qualifications model (III)
Estimate Std.err. Estimate Std.err. Estimate Std.err.
Experience, home country 0.002 (0.005) 0.002 (0.005) 0.005 (0.005)
Family reunification, spouse -0.074 (0.054) -0.042 (0.053) 0.014 (0.047)
Speaks Danish well (SDW) 0.192** (0.052)
SDW * HS, home country 0.057 (0.078)
SDW * Voc, home country 0.019 (0.141)
SDW * Adv, home country 0.122 (0.112)
High school, dest. country 0.043 (0.100)
Vocational, dest. country 0.054 (0.055)
Advanced, dest. country 0.225** (0.048)
Experience, dest. country 0.077** (0.009)
Experience squared -0.002** (0.001)
Note: 756 observations. Robust standard errors in parenthesis. Odds ratios. * p<0.1; ** p<0.05.
To start with the base model (I), the table shows that country of origin matters as Pakistanis are less likely to be employed than are the Turks and Iranians. Immigrants from rural areas are more likely to be employed in Denmark, given their level of home-country qualifications.
Age at immigration and being a woman are also significant, and both have a negative impact on employment rates, whereas immigration status is not significant. Finally, the likelihood of being employed increases with years since immigration, which in previous studies has been interpreted as a sign of assimilation, but the effect is small and insignificant2. It is worth mentioning though that without controlling for age at immigration, the effect of years since immigration is large and positive.
2 A quadratic specification for both home-country labour market experience, age at immigration and years since immi-gration has been estimated for all models, including the following sections, but the quadratic terms have been left out where insignificant.
With respect to home-country qualifications, we see a similar picture as for the education models: even though the impact of home-country labour market experience is of the expected sign, it plays a limited role for the employment status in the destination country. The effect is both of a limited magnitude and insignificant. However, both immigrants with a high school degree and immigrants with an advanced degree from the home country are more likely to be employed, raising the probability by 11 and 13 percentage points, respectively. These are very large employment effects, and when compared to a baseline probability of around 60% they constitute relative effects of 18 and 22%.
The presented model can be thought of as showing the sum of effects of home-country skills with a direct impact on employment status as well as with an indirect impact working through the accumulation of destination-country qualifications. In the following we add dif-ferent measures of destination-country qualifications to separate the direct and indirect ef-fects from home-country qualifications as well as to gauge the independent impact of destina-tion-country qualifications.
Columns four and five in table 6.6 show the results from the model where Danish lan-guage proficiency is included both separately and interacted with home-country education (model II). It shows that most coefficients are of the expected sign, i.e. that destination-country language proficiency generally improves the chances of being employed and that good destination-country language proficiency increases the effect of home-country educa-tion. The latter are, however, not significant.3 The independent effect of good Danish lan-guage proficiency on the probability of employment versus non-employment is large and sig-nificant as expected. It is worth mentioning that a similar exercise has been conducted with English language proficiency. As many Danes and immigrants (especially Pakistanis) speak English reasonably well, good English language proficiency may open doors to the labour market. However, both the independent effect of English language proficiency as well as the interactions with home-country education are insignificant in the employment model.
Therefore, our findings do not support those of e.g. Chiswick & Miller (2003). In their analysis of Canadian data, they too find that destination language skills are an important fac-tor in determining immigrant’s labour market performance (measured by earnings in their study). In contrast to our study, however, they find a significant complementarity between language skills and both schooling and pre-immigration experience.
The results from Model III (cf. Box 1) including destination-country experience and edu-cation are presented in column six and seven of table 6.6. It is seen that Danish labour mar-ket experience clearly increases the probability of employment, but at a marginally decreas-ing rate. Destination-country education beyond primary schooldecreas-ing is positively related to the probability of being employed in most cases, but it is only an advanced degree in the destina-tion country that is significant when the baseline variables are also considered. A destinadestina-tion- destination-country advanced degree raises the probability of being employed by 22.5 percentage points (a relative effect of 34%). It is worth mentioning that this is a large effect, also relative to
3 We have examined the effects on predicted probabilities following Ai & Norton (2003) and the conclusions are the same.
Danes. For Danes of a similar age, the difference in employment rates (controlling for labour market experience and gender) between those with an advanced degree and those with at most primary schooling is only 11 percentage points or 15% in relative terms.
It is surprising that immigrants who complete a Danish vocational degree do not have a higher employment rate than immigrants with lower levels of Danish education (including none). First of all, an explanation partly comes from the fact that few immigrants (only 73) in our sample completed a vocational degree. Second, by further scrutiny it turns out that the missing impact of a vocational degree is “explained” by the level of Danish labour market ex-perience. Hence, without controlling for Danish labour market experience, the effect of a vo-cational degree is much higher and resembles the difference in raw employment rates pre-sented in table 6.3.
Table 6.6 also shows the indirect effect of home-country skills in the model (II) and (III) where destination-country qualifications have been added. It is seen, when compared to col-umn two, that in both models, the indirect impact of home-country education is insignificant.
In particular, the positive impact of having either a high school diploma or an advanced de-gree that was observed in model (I) is markedly smaller in model (II) and (III). These results lead us to conclude that education obtained in Iran, Pakistan and Turkey does not improve employment outcomes for immigrants from these countries once we have taken account of any formal education these individuals may have taken in Denmark. However, home-country education obtained in these countries improves the labour market attachment indirectly by increasing the probability of obtaining an advanced degree in Denmark.
As a final observation, we compare the effect of years since immigration across different specifications. From table 6.6, model (III) it is observed that the more years since immigra-tion, the lower the chances of being employed according to this model. This could be inter-preted in the way that because we are now controlling for both actual labour market experi-ence and accumulation of Danish education, time spent in the country without skill acquisi-tion is not productive in terms of increasing the chances of getting a job. Note that in com-parison, the impact of years since immigration is positive in the models that do not control for Danish labour market experience and education, as found in many previous studies, but it is insignificant.