The Interrelation between Unemployment and Overqualification among Second Generation and Ancestral Population in Sweden

Wooseong Kim , Stockholm University
Raffaele Grotti, European University Institute
Siddartha Aradhya, Stockholm University Demography Unit

Previous studies found that the second generations show higher risks of overqualification, defined as having educational qualifications that exceed those required for the job, and unemployment compared to natives with two native parents. This study contributes to the immigrant integration literature by investigating whether overqualification and unemployment are interrelated over time such that one disadvantage begets the other, generating a vicious circle of accumulating labor market disadvantages among second generation immigrants. Specifically, this paper analyzes this interrelationship, comparing second generation groups with the ancestral Swedes by focusing on the transition from the past to the current labor market participation state. In particular, we ask: does past overqualification/unemployment affect current unemployment/overqualification, and how does it vary between ancestral Swedes and 8 second generation origin groups? We answer these questions using dynamic correlated random-effects multinomial models to study the effect of past on current employment with different matching statuses and unemployment. We use Swedish register data to follow individuals over their early working careers. Our results show that ancestral Swedes are more likely to experience transient disadvantaged positions because of higher probabilities of transitioning to matched employment. Importantly, for all ancestry groups, the probability of transiting to a matched job is higher among the unemployed as compared to the overqualified, which is in contrast with the career mobility theory. Moreover, higher transition rates from overqualification to unemployment, together with a higher unemployment stickiness, suggest that the second generations experience more severe entrapment into unemployment than ancestral Swedes.

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 Presented in Session P3. Migration, Economics, Policies, History