Does the economic crisis hit immigrants harder?

Abstract

Does the current economic recession hit immigrants from non-western countries more than those who are native born? Traditional theories about ethnic segregation and segmentation suggest that immigrants are hit harder by recession than their native born counterparts due to their disadvantaged position on the periphery of the labour market. The article sheds light on two hypotheses on the labour market position of immigrants during the current economic crisis. The first hypothesis is based on the theories of the dual labour market, flexible labour market and post-industrial society and suggests that immigrants’ location on the periphery of the labour market means that they are the first to lose their jobs as a consequence of economic downturn. The second hypothesis is based on theories on the transitional nature of the labour market and suggests that immigrants have more difficulties in the transition from unemployment to employment. The article presents empirical evidence that the decline in immigrants’ employment compared with the employment of native born Danes is less pronounced than traditional theories suggest. The article also shows that the transition from unemployment to employment is much more difficult for immigrants than for native born Danes. A central argument in the article is that ethnic segregation is not based on disadvantages in the risk of dismissal, but rather on the ability to return quickly to employment after dismissal. The long term consequences of the economic recession will then be more pronounced for immigrants than for native born.