Labor Mobility: Migration, adaptation and impact of the immigrants in Sweden

Mälardalen University Västerås, 2010-05 - 27 School of sustainable Development of society and Technology Bachelor Thesis in Economics Tutor: Johan Linden Labor Mobility: Migration, adaptation and impact of the immigrants in Sweden Authors: Le Dang Vinh (880207-T095) Roman Alam (870702-0817) 1

ABSTRACT Date: 2010-05 - 27 Level: C-thesis in Economics, 15hp Authors: Roman Alam (870702 0817) Le Dang Vinh (880207-T095) Title: Tutor: Problem: Purpose: Method: Labor Mobility: Migration, adaptation and impact of foreign labor force in Sweden Johan Linden, School of sustainable Development of society and Technology During the beginning of 19 th century Sweden was exposed to relatively heavy labor and population outflow out of the country, mainly into United Stated in search of better living and working conditions. However, today the situation is reverse. Sweden, due to its great welfare, has been increasingly accepting many people whom are exhaustedly seeking refuge or a better life. Those immigrants clearly get themselves adapted to the Swedish local labor market and simultaneously impact on it. We desirously aiming to research and clarify how those outsiders have been managing to be well survived and developed themselves to be one important part of Swedish labor force. In detail, we would like to know if there is any correlation between ages and education and the potential job, which an immigrant will get. Moreover, other additional details on whether their current economical situation has been improved or worsened by the movement/ immigration to Sweden will be clearly indicated. The paper is based on the theoretical tools, published source, statistical figures and previous empirical studies. The factual research works on foreign labor force in Sweden are also regarded as the most important part of our study. Conclusion: There are many immigrants nowadays can be easily recognized at each miles of the entire Sweden. For different reasons they have decided, or have been compelled to become civilians of Sweden and either, a part of local Swedish labor force. Conclusionally, their different processes of adaptation, improvement and impact on Swedish labor force will be evidently presented through our research works. 2

ACKNOWLEDGEMENT We indeed would like to thank you, our supervisor Johan Linden, for whole-heartedly leading and instructing us on being successful at doing these research studies papers. Moreover, we thank to all of fellow friends for all of the supports in gathering information and making actual statistical research. Thank you very much to everyone. Roman and Vinh 3

TABLE OF CONTENT Table of Figure and Table... 5 1. Introduction... 6 1.1 Problem Formulation... 6 1.2 Review of the literature on the topic... 7 1.3 Paper Outline... 7 1.4 Aim of The Thesis... 8 1.5 Limitations... 8 1.6 Methodology... 9 2. Analysis... 11 2.1 The Migration and Adaptation process of the immigrants in Sweden... 11 2.1.1 Migration as a human capital investment... 11 2.1.2 Statistical analysis... 11 2.1.3 Reasons to choose categories/intervals for income instead of pure monetary wages... 15 2.1.4 Movement between income intervals... 15 2.1.5 Supporting evidences... 17 2.1.6 Relationship between income and education... 18 2.2 The impact of immigrants on the Swedish labor force... 19 2.2.1 Immigration facts... 19 2.2.2 Immigrants in the labor market... 21 2.2.3. Immigrant's impact on the integration policies... 23 2.2.4 Immigrant's impact on the economical and social performance... 23 3 Conclusion... 25 4 References... 26 5 Appendix... 28 4

TABLE OF FIGURE AND TABLE Figure 1: Immigrant gender... 12 Figure 2: The decade in which person was born... 12 Figure 3: Education chart is measured in number of years of schooling... 13 Figure 4: Additional education in Sweden... 13 Figure 5: Current income... 14 Figure 6: Previous income... 15 Figure 7: Movement between income intervals... 15 Figure 8: Number of Foreign-Born Permanent Residents in Sweden from Principal Sending Countries, 1960 to 2004... 20 Table 1: Index for employment rate at ages 16-64 years... 21 5

1. INTRODUCTION 1.1 Problem formulation Since the beginning of time, people have been moving across the globe for various reasons. Some had to reallocate to other places because of war, depletion of natural resources or simply because they were forced to. During the last two centuries transport and other means of communications has had a critical breakthrough. This, among with general improvement of living standards and simplified travels made an incredible impact of how and why we are moving today. Usually when people are moving from one point to the other they tend not to bring to many belongings with them, hence labor becomes one of their only assets. Labor mobility has different causes behind it. Some flee from war and natural disasters, while others move specifically because of changed labor location. Thousands of immigrants managed to get themselves the permanent residence permit or citizenship. During different eras, there have been several causes to the new Swede s reallocation. The main Immigrant stream began in 1931 when there were on average of 4000 new immigrants per year. Seventy years later (2001), this number was roughly ten times higher. Due to a number of political and glob-economical reasons, many people have decided or were forced to come here. During the latest election the right-wing Nationalistic parties such as Sverigedemokraterna got more votes than ever, showing once again that for every action there is always a reaction. Many studies have been done within the subject of immigration, such as the economical impact, and a large number of pure statistical analysis. There are also many similar publications related to labor market and immigrants. While deciding upon a subject for our C-thesis in Economics, the authors could not find any larger study covering the reasons to why the immigrants end up in the working sectors they do. No doubt, many of us have heard horror like stories about someone with a high education and prestigious occupation such as a chemist or doctor who is forced to clean floors for living. We would like to know if there is any correlation between age and education and the (potential) job an immigrant will get. Furthermore, we will try to find some additional detailed information on whether their current economical situation has been improved or worsened off by the movement/immigration to Sweden. Adversely, once the people from other countries, which could be called the outsiders, came into Sweden for any reasons, they will be entirely forced to manage to get a job for the sake of their existences. Each individual of this immigrated community is everyday working all over the country. It does not matter what sort of job they are doing or how much money they are earning, the country or the local labor force in Sweden in particular, will certainly get impact by them, in one way or another. We are intending to find and state out the effect of their attendance on the local labor force and policies in Sweden. 6

1.2 Review of the literature on the topic There is a big amount of studies made by different institutions which cover the topic of immigrants and their adaptation or either their impact into both Swedish society and labour market. Our paper goes deeper into the subject but will be compared to these studies: Tio år efter invandring- tre av fyra by Karin E Lundström 2007 Published by Statistiska Centralbyrån(Statistics Sweden). A group of immigrants is followed during a ten years period (starting in 1997) to observe their progress in finding work etc. Their conclusion is as following: education is one of the most important factors in job search. Efterkrigstidens invandring och utvandring by Åke Nilsson 2004 Published by Statistiska Centralbyrån(Statistics Sweden). One of the largest (139 pages) demographical and statistical studies published online. Covers a period of 1875-2003 and measures most of the in- and outflows of people to and from Sweden. A very detailed research, explains many different factors to why people move, both out and inside of the country. There is also a continent-by-continent illustration and statistical analysis of it. Svensk invandring och arbetsmarknaden. Återblick och nuläge by Anna Essen 2002 Published online by Institutet för framtidsstudier Research of Swedish labor market and how it is affected by the immigrants. In addition, various published empirical studies and research works have also been used as the sources of our papers (Listed in reference part). 1.3 Paper outline With all due of respect to who might have attention on our works, this paper outline will generally give everyone of you the brief structure and supportive information, which has been covered in our entire thesis. Our thesis will be divided into two main sections: Section 1: This section describes our data findings and the process of factual statistics analysis. We intend to present our knowledge of the immigrants adaptation process in Sweden and to find out what would affect their economical situation and so on (ages, times of arrivals, level of schooling, etc) 7

Section 2: This part was created with the intention to discuss how the immigrants socially and economically influence their host country, Sweden. Various figures and parameters, which were picked up from published empirical studies and statistics of Sweden, was effectively used to bring up a general view on this topic. The conclusive paragraph and references will also be enclosed in this section. 1.4 Aim of the thesis The aim of this thesis is to graph and describe the process of adaptation of outside labor force into Swedish labor market. Moreover, the paper will focus on the newcomers impact on internal labor market and also the migration policy change. Our sub goal is to find out in which sectors immigrants are allocated but also an update of their economic situation will be discussed. 1.5 Limitations This thesis is written based on data gathered through an empirical research. Therefore, we decided to write a questioner where we ask a number of simple questions and distribute it through a number of companies, but also by simply asking people within our target area to fill them in while standing in the center of city of Västerås. Empirical approach has often a number of limitations, which can affect the result of the study and even lead to accepting/rejecting the hypothesis when the opposite is true. In statistical studies, there are two different types of errors that can occur: Type I Error: rejecting the hypothesis when it happens to be true Type II Error: accepting a hypothesis when it should be rejected Our hypothesis: Null hypothesis: There will be a negative change in income because inflow of the labor force is forced to reallocate to Sweden opposed to doing so by choice Alternative hypothesis: There will be a positive change in income. There is also a maximum amount of probability, which we are willing to risk a Type I error, this is called the level of significance of the test. This probability was specified before we chose our sample, so that the result obtained will never have an influence on our decision. In this particular paper, we decided that this value would be 0.1. This means that we think that there are at most 10 chances in 100 8

that we would reject the hypothesis when it should be accepted. In addition, when the null hypothesis is true, we are about 90 per cent confident that we made the right decision. Another problem that can interfere with our research lies in human nature. Sometimes and for various reasons, people have an intention to not to tell the truth. We assume, again that at most 10 per cent of our sample space will give us incorrect information. In order to reduce the chances of that happening we made our questioner anonymous and never looked at what our test subjects were written during the time the paper was filled in. Another factor, which is important to us, is age. Some people, especially younger than 35 years old might have misinformed us. There is a reason to that. In some cases, illegal immigrants have stated incorrect age upon their arrival to Sweden in order to increase their chances of receiving permanent residence. For instance, a 20+ year s old man can sometimes state that they are 17 or even younger so that different and often mild laws and rules will apply in their case during the time of investigation. 1.6 Methodology: The method we chose to use is to do interviews and have the test subjects to fill in the surveys with a number of questions. The answers should give the authors enough information to draw some parallels and arrive to a conclusion. Our work within these interviews and surveys has mostly focused on the immigrants ages, their economy performances (based on jobs occupations and income), previous and current level of education. Despite the matter of fact that it has been unexpectedly hard for us to collect the data, we fortunately managed to get helpful information about their immigrants process of adaptation. We also found out and made use of various statistical data, parameters through internet source. These data has provided us the exact periods of migration, the average total amount of the immigrants who have currently been living in the entire country and in each state. In the part appendix, a clear questionnaire has been presented with the intention of supporting our research work to become understandable. The textbooks, available published projects, or previous studies of the both national and international famous authors that contributed to the provision of research and help finding out their educational achievements and potential jobs they will get within their level of schooling records. The education obviously plays an important part in describing the immigrants efforts to keep their income (at least) at the same level as in their home country. Obviously, the more effort an individual is making, the more he/she will invest into human capital. Besides, the impact of immigrants on the economical performance of Sweden and Swedish labor market is clearly defined within the theories and models or explanatory of various empirical projects, previous research works and studies on this field. The impact should have included various changes in the level of wages, income, economically governmental policies and strategy development. We will summarize and ultimately make our conclusion based on the function that have been listed earlier, and based on the statistical figures and graphs, which are provided by us- the contributor of this study. 9

As mentioned above, the difficulties included language barrier, lack of time and even semi-hostile behavior from our test subjects. It was rather difficult to find a person that would fulfill all of our requirements. In order for this study to be efficient we needed someone with foreign background, old enough to fit the questions and being able to understand and answer the questions. After our original plan of doing a case study of one large (1000-11000 employees) company failed due to practical reasons we decided to just head down town of city of Västerås and simply ask appropriatelooking people. One problem with this approach was the time of the day. From eleven and until three o clock rush hour, we realized that many of our potential targets were either unable to even understand our questions or born in Sweden. There is a simple explanation to the first cause. Most of the people during the lunchtime are already eating, on their way to do so or heading back to work, hence not having the time to participate in out study. The rest could not help us because they were unemployed because of various reasons and thus less desirable for our particular questions. Our method changed somewhat after making these discoveries. By making a contact with smaller (less than 100 employees) businesses located in the center of Västerås, we could bypass some, but not many of the obstacles in our way. Fewer personnel per company made it easier to get in touch with our target group. After gathering the data, we will make statistical analysis of different relationships. These will include education and income, current and previous economic situation, etc. It is also at least as important to make a comparison between previous and current type of job in order to see whether an improvement had taken place. Once again, our guess is that it must be hard for an immigrant to keep the same kind of job they had in their home country. On the other hand, we could not know this with any degree of certainty because there are virtually no or at least very few studies of this type. The impact of immigration upon Swedish labor force is going to derive from a number of different economic studies. The result of our empirical research is then compared to the ones above, so that we can draw parallels between the two. We are interested in the relationship between theory and practice and the causes behind. Economical part will consist of a discussion that treats the question Are these new labor force participants contributing to the society or are they an inferior investment? 10

2. ANALYSIS 2.1 The Migration and Adaptation process of the immigrants in Sweden 2.1.1 Migration as a human capital investment According to the theory, migration is a positive investment when the present value of earnings in potentially new home country exceeds them sum of present value of earnings at home plus moving costs. The latter can consist of actual physical mean of transportation but also a psychic cost, which in turn reflects some kind of pain or even suffering that occurs when moving. Thus: The main point of moving is to either: 1) Improve ones financial status 2) Reconnect with ones relatives 3) Seek refuge for various reasons PV home country PV away M = Net gain to migration During different eras, Sweden has accepted many people for different causes. The main inflow started at the end of World War II when government had an increased need of human capital due to increase in production. By reading a big amount of articles and literature, we could see that there were different patterns of inflow of outside labor force. During the 1980 s, immigration has changed its characteristics. The majority of people coming here would fall into third category. This forced the first category nearly disappear in the huge amount of refugees and people coming in order to reconnect with their relatives. Today there are roughly more that a million of immigrants in Sweden and majority of them arrived after 1980 s. (Åke Nilsson. (2004), Efterkrigstidens invandring och utvandring) Few can argue that there is a better way off adapting to a new society than working. Hence, we chose a sample of 100 people to see how they have adapted to a new life in Sweden and in which sectors of society they ended up. Obtaining a bigger sample turned out to be extremely difficult since many of the people we tried to interview had different excuses and sometimes even showed signs of hostility towards our study. 2.1.2 Statistical analysis Out of 100 people we managed to interview, we came up with some interesting results. The questions that we wanted to get some answers for are in the appendix. The reasons we chose these following particular questions: we needed to gather enough data so that we could draw parallels between a few critical factors for adaptation into Swedish labor force and even society. The raw data was then analyzed to get some pure statistical results so that we could draw some conclusion and comparison. 11

We assume that the majority of the immigrants within our sample were forced to move to Sweden opposed to doing so by choice. Hence, the economical situation has not improved because of the difficulties related to movement. The following figures, which is painted based on the result of our surveys, is the table represents our sample and its characteristics. Figure 1: Immigrant gender By pure coincidence the proportions of males versus females turned out to be almost perfect, 52 females and 48 males. There was no specific difference between neither of the genders characteristics, which helped our study to be more accurate and non-discriminating. Many may argue that a sample of only 100 people is not representative enough but due to lack of resources, time and cooperation from bigger companies, we had to narrow it down to this. Luckily, the trends we observed seemed plausible enough to give us some conclusions. The decade in which person was born Figure 2: The decade in which person was born 12

Education chart is measured in number of years of schooling Figure 3: Education chart is measured in number of years of schooling Figure 4: Additional education in Sweden 13

Note: Additional education after coming to Sweden SFI (Svenska för Invandrare) Basic course in Swedish language, which upon completion should give enough knowledge to speak, read and understand simple day-to-day sentences. SAS (Svenska som Andra Språk) Intermediate course in Swedish Various courses The evidences have been obtaining at different educational institutions, such as Komvux, KY etc. Typically focuses on at most two years of some specific professional basis. These courses can include knowledge within some profession, such as salesperson, hairdressers, and technicians and so on. Various licenses Driver s licenses, license to start a business, open a store, etc. Other Courses/programs offered at universities, other institutions that do not belong to any other category. Figure 5: Current income 14

Figure 6: Previous income 2.1.3 Reasons to choose categories/intervals for income instead of pure monetary wages Many people do not know exactly how much they earn, but most of the people can answer roughly in which class they are located. Also answering in pure numbers can be a sensitive issue for some individuals. Hence, we chose this particular form of answers. Furthermore, there is no need to calculate exchange rates, and to take living standards into account, etc. Every figure is adjusted to simplify the comparisons. While doing interviews down town in Västerås some people had linguistic difficulties with understanding our questions, however none of them had troubles with placing themselves into one of the income intervals. Hence, the choice of categories turned out to work fine. 2.1.4 Movement between income intervals The following chart shows movement among intervals: Figure 7: Movement between income intervals Delta income Very Low Low Average Average+ High Very low 1 2 8 2 0 Low 0 6 4 6 2 Average 5 5 23 10 8 Average+ 0 4 3 4 2 High 0 2 2 0 0 Vertical axis represents income today and horizontal axis shows income in Sweden. Delta income shows the percentage points of movers between the groups. For instance 10 per cent of our sample space had a negative change and went from receiving a more than average (Average+) 15

income to just an average (Average) ditto. Another example shows clearly that 23% per cent stayed within the same middle of the income spectrum. Various observations: In general, a loss of high income was observed. Looking more closely into the figures, we could observe the following: Among college graduates (12+ years of schooling category), there was only a slight loss of less than 7 % of income. That means that 93 % could improve or keep their income in a steady state. Moreover, the age did not seem to have been an issue, on contrary, age means experience, which is highly sought after by the employers. Most of those who experienced a loss had started a new business. The loss can be explained by rather rough taxations and regulations set by the Swedish government opposed to a rather simple/easy set of rules in other (under-developed) countries such as Turkey for instance. The increase in Average income class came mostly from High and Average+ ditto. As we mentioned above, the people whom experienced a loss, were rarely highly educated and it was difficult to find other additional explanations. A wild guess can relate to the fact that in roughly 30% of the cases, the person had a sales type of job that could have been successful enough to place him/her into a higher category on our income scale. Country of origin did not affect the study in any way and would not be a reliable variable in a sample of our size. Only 11% came to Sweden from other industrialized countries while 89% came from all over the globe. Former residents from Canada, Australia, Holland and Japan had a more than twelve years of schooling and were able to keep a more or less unchanged standard of living in terms of wages. The following under-developed countries were spotted: Russia, China, Vietnam, Iraq, Iran, Bolivia, Ukraine, Somalia, Turkey, Kazakhstan, Uzbekistan, Colombia, Afghanistan, Lebanon, Brazil, Thailand, Sri Lanka, Syria, Ethiopia, Potential causes for loss of higher income because of force major. On of the better comparisons were high-income takers. It happened to be the case that 12% of our sample had high incomes before coming to Sweden. We were surprised to find out that only 4% of our sample had the same income today. After looking at the link between education and wages, we observed something interesting. Most of the people who lost some of their wages by moving to Sweden had little or no further education after coming here. Furthermore, they were older than the rest of the test subjects. In reality, there is nothing strange with that. In order to find out by which means people reallocate here, we interviewed some illegal immigrants for more information. The results were incredible. For a single person from Afghanistan, the cost of smuggling and traveling to Sweden is anywhere between 16

5000 to 15000 US dollars depending on the quality of travel. Considering that an average monthly wage in Afghanistan is roughly 100 dollars, only a few citizens can afford to migrate. According to many adequate stories told by immigrants from other Asian and African countries, we could conclude that just the very elite of the society can make such a move. The story does not end there though. After spending the needed amount of money, these immigrants find themselves in a completely new environment without basic skills and knowledge of the language spoken in Sweden. This barrier prevents the high-income earners from obtaining the same income long until they can adapt to the new environment. A good example was one of the people we interviewed, a 52-year-old former Kurdish jewelry shop owner, whom were forced to flee his home country. He borrowed more than 10 000 US dollar so that he could pay to the refugee smuggler in order to come here. His skills and experience was not of any significant value so he found him self-indebted, unemployed and surviving on social security check, slowly paying off the amount he borrowed. This was one of the most intense case that we could observe. It did not follow the trend. In addition, it is a cruel reality, which the immigrants have to face off. Other causes for negative change in income There is no doubt that there is a link between years of schooling and potential income. However, some people might face difficulties when they come to a new environment even though they might be highly trained, experienced and have a better education than the natives do. In some cases, their diploma may not be recognized or valid due to outdated knowledge and lags behind because of technological pace. One of our test subjects was a nurse with additional specialization within his field who spent more than four years getting his education. Upon arrival to Sweden, he had no choice but to start a small shop in outskirts of a lard Swedish city simply because none of his skills and expertise counted for anything. Change in income for average education and types of jobs. Most of the test subjects within our sample that had a high-school diploma were able to end up in almost the same field of jobs after moving here. Their income did not differ too much from their previous ditto and they ended up in the same middle class as they were in to begin with. 42 % of them had some additional courses or obtained a new license in order to renew their previous working skills. As a whole, their economical situation remained the same and they had a stable process of adaptation. 2.1.5 Supporting evidences Supporting evidence (costs of migration) This result is supported by the high variable M in PV home country PV away M = Net gain to migration Borjas Labor Economics explains the following results in chapter 8 under Why Is There So Little Migration? (p. 322-323). According to the author, the M variable is too high in some cases so even large income gap in-between different countries may lead to a loss of income for some individuals. 17

Just as the result that we obtained, the author mentions that many people chose not to move even though the income differences can be high. Illegal immigration has is large cost to those who chose to move, on the other hand, the person in question had little to no choice. Supporting evidence (dispersion in skills) According to the Roy Model, there will be dispersion in skills between different nationalities cause by the fact that the immigrants come from different countries. This raises the questions: Which group of people would migrate? Is this the most or the least skilled ones? Direct quote from Borjas Labor Economics chapter 8, section 6 (page 337) Consider workers residing in a country that offers a low rate of return to a worker s human capital so that the skilled do not earn much more than the unskilled. This is typical in countries such Sweden that have relatively egalitarian income distributions and almost confiscatory income tax systems. Relative to the United States, these countries tax able workers and insure the unskilled against poor labor market outcomes. This situation generates the incentives for the unskilled to migrate to the United States because they have the most to gain by moving. Put differently, the United States is the recipient of a brain drain. 2.1.6. Relationships between income and education University/college Since we observed that more than one fourth (26%) (Figure 3) of our sample space invested more than 12 years in schooling, we decided to take a deeper look at the highest form of education. As seen in the graph above, 45% of our test group had a standard 12 years education which in turn is connected to a precisely 52% (Figure 5) share of average income earners. The figures are tightly connected to theory of schooling and future earnings. According to the theory, Present Value is a good estimate of future earnings of more than a high school education: w w w PV 12 H 2 3 (1 r) (1 r) (1 r) For instance, one of our test subjects was born in South America in 1982 and was received a university diploma in Sweden. Up until 2010, none of Swedish universities charged a tuition fee so the PV of that persons earnings for the next coming five years would be: PV 7688 12 7688 12 7688 12 H 246601 SEK (1 0.06) (1 0.06) (1 0.06) 12 2 3 Where H = 0, w = 7688 12 SEK. Taxes not included. 18

This was proven the truth in our case study. We counted 25000+ SEK as a monthly salary to be a somewhat higher than average income and the interest rate was chosen to be 0.02 percentage points higher (to compensate for the option of forgoing wages by studying) than the highest risk free interest rate for savings at the moment of writing in Sweden. The theory is closely connected to practice in other cases as well. Note: Students or other type of loan are not taken into account because many of the non-native students in Sweden either are working part time jobs or receive funds from their parents. Universities that charge tuition fees are rear, if not non-existent in Sweden as to date of writing. Cost of attending college/university does not take opportunity cost and time into account; therefore, we set the cost of education to zero. 2.2 The Impact of Immigrants on the Swedish Labor force: 2.2.1 Immigration facts: Accordingly, Sweden is the largest Nordic country by size and population. Moreover, the country industrialized at the end of 19 th century and in mid-20 th century was well known for combining the liberal market economy with state-run welfare policies. Afterward, the immigration recruitments occurred and generated tax-based that required for an expansion of the public sector in Sweden. The immigrants in the 1950s and 1960s mostly came from neighboring Nordic countries, with the largest numbers coming from Finland. However, since the early 1970s, immigration has consisted mainly of refugee migration and family reunification from non-european countries in the Middle East and Latin America. In the 1990s, Sweden received thousands of refugees from the former Yugoslavia, whom originally were intending to come to seek asylum in an advanced host country. Currently, about 12 percent of Sweden s population is foreign born. The total number of Foreign-Born Permanent Residents in Sweden from Principal Sending Countries, from 1960 to 2004, will be clearly shown in the figure 8, next page. According to the facts, which have been mentioned earlier, the foreign-born immigrants took part approximately 12 percent of Sweden s population. They divided into several groups along with their different former land and purposes of immigration. No doubt, he immigrants who migrated to Sweden for various reasons (refugees, family reunification, labor immigrations, and asylum seekers) have always made an impact, be that positive or negative on this host country. In addition, we would like to find out a correct and satisfactory answer to the question: what is the immigrants impact on the labor forces of Sweden? 19

Figure 8: Number of Foreign-Born Permanent Residents in Sweden from Principal Sending Countries, 1960 to 2004 Country of origin 1960 1970 1980 1990 2000 2004 Scandinavia Denmark 35,112 39,152 43,501 43,931 38,190 41,663 Finland 101,307 235,453 251,342 217,636 195,447 186,589 Norway 37,253 44,681 42,863 52,744 42,464 45,000 Other Europe Estonia 21,000 18,513 15,331 11,971 10,253 9,920 Germany 37,580 41,793 38,696 36,558 38,155 40,826 Greece 266 11,835 15,153 13,171 10,851 10,794 Poland 6,347 10,851 19,967 35,631 40,123 43,472 Former Yugoslavia 1,532 33,779 37,982 43,346 131,772 134,940 Refugee-sending Chile 69 181 8,256 27,635 26,842 27,699 Ethiopia 59 346 1,797 10,027 11,907 11,213 Iran 115 411 3,348 40,084 51,101 53,982 Iraq 16 108 631 9,818 49,372 70,117 Lebanon 15 240 2,170 15,986 20,038 21,106 Somalia 0 68 146 725 13,082 15,294 Turkey 202 3,768 14,357 25,528 31,894 34,965 Other countries 58,914 96,406 131,413 205,654 292,307 352,682 GRAND TOTAL 299,879 537,585 626,953 790,445 1,003,798 1,100,262 Total population 7,497,967 8,081,229 8,317,937 8,590,630 8,882,792 9,011,392 Percentage foreign born 4.0 6.6 7.5 9.2 11.3 12.2 Source: Befolkningsstatistik 2004. Örebro: Statistics Sweden, 2005. 20

2.2.2 Immigrants in the labor market Historically, there was a huge amount of immigrants that early came into Sweden from the other Nordic country such as Finland, Norway and Denmark during 1950s and 1960s. However, in this thesis we have mostly been working on researching and investigating the situation of the immigrants who came here later in 1970s up until now.(by Jan Ekberg, AMID Working Paper Series 48/2006). According to various empirical studies and worldwide published internet sources, we found out that most of the immigrants who came into Sweden in these periods of time, from 1970s-1990s or later, are in the cases of family reunification, refugees or asylum seekers from developing countries over the globe (Africa, Middle-East or Eastern Europe, etc). Generally, the situation of these immigrants in the local labor market in Sweden has gradually varied and fluctuated due to various subjective and objective involvements. In the years of 1970s, a number of very first generation of immigrants has landed Sweden. Despite of their poorly old skills, educations and lacked accesses (in comparisons with the native Swedish), they still kept enjoying fully employment as the natives Swedish did in a long period. Especially, in several periods, the immigrants employment rate was higher than the native s employment rate. Moreover, according to the previous published surveys and investigation, that the immigrant women would sacrifice their youth in fulltime working, while the native Swedes women who just were halftime participated in their works, and spare another half of their times on run the household and taking care of their kids or entertaining. They were in a good situation with high employment rate with high annual working income as a result. This period could be considered as a golden age of the immigrants in Swedes labor market. 21

However, this effect was not lasting too much longer when it came in to the 80s period- when the boom economy in Sweden occurred. There were plenty of immigrants were coming into Sweden within the case of family reunification, refugees, and asylum seekers. The first generation, who came to Sweden in the previous periods and enjoyed the golden age of high rate in employment, desired to bring their entire families here with great hope of finding a better job. The Eastern European asylum seekers also came with no different aim to escape from the low employment rate and low payment in the homeland. Nevertheless, the more outsiders came, the more job occupation would be taken off. In spite of the fact that many of immigrants who came here in this period, have the same years of schooling, same level of educations as the native do, but never had a chance to enter the labor market. As the result, their situation worsened off with higher rate of unemployment along with lower annual working income. The deterioration developed even further during the depression in the years of 1990s. Fortunately, the Swedish economy has recovered and there were several improvements in the economical situation of immigrants. The employment rate has consequently risen in comparison with the previous periods (1980s). However, in the last few years of 1990s, there were no further improvements, although, the generation of immigrants, who lived in this period, have been as well-educated by the Swedish educational system as the natives. The immigrants at that time were actually in a worse situation with lower employment rate and higher unemployment rate. In the later periods, there has been a tendency of migrating into Sweden, mostly with the intention to seek for a better life, is the same in many countries, especially the advanced and developed countries. Beside the immigrants impact on one element of Swedish labor market, like the level of employment rate which were mentioned above, there are various other aspects will be tightly described and clearly analyzed in further section of our thesis. No doubt, the employment rate gradually went down over those periods has clearly implied that situation of the immigrants and the Swedish labor market in general has been worsened off. According to various published empirical studies, we came up with two following explanations: 1) Initially, since the immigration patterns have changed from immigration from inside Europe to immigration from outside Europe (such as immigration from Africa, Asia or Latin America, etc), the risk of discrimination has increased. It was actually a good thing when the hirers usually chose their workers based not only on skills, techniques or knowledge but also on their feeling of security. Nobody would be brave enough to hire and work under the same roof with someone whom does not fully understand in the past. Misunderstanding and wrongful behavior could cause serious fatal errors for any organizations. 2) After the industrialization in 19 th century, Sweden again has moved on to generate the country to be a post-industrial place with structural organization that demanded highly trained skills and knowledge. These requirements would be imaginary conditions that the immigrants in previous periods could ever possibly have in their minds. Besides, the distant ethnic and organizational culture has increased simultaneously with general development would also be a reason why the numbers of opportunities for the immigrants has been lower off. 22

2.2.3 The immigrant s impact on the integration policies The clearest changes in generating policies we could see were the changes in integration policy. Sweden never actually had an official integration policy to incorporate the immigrants into the mainstream society in 1950s and 1960s (by Charles Westin, Centre for Research in International Migration and Ethnic Relations, Stockholm University). However, the decision to build up a fundamentally official policy came up and declared by the Parliament when they realized the need to deal with the migration streams, which were mostly due to the coming of refugees. The whole integration program mainly consisted of following components: giving the immigrants the freedom of leading their lives wherever they desire, equaling the social rights among and between immigrants and native Swedish. The immigrants could possibly choose to assimilate themselves to social Swedish culture or stay as they already were. The language or applied education programs also were created in order to support the immigrants for managing themselves in Sweden. The immigrants would also receive the right of national or provincial voting. The Swedish National Parliament decided to generate the subsidized policy for the immigrants, especially those who come from war-suffered countries. The strategy-maker should have known that the process of moving the immigrants from welfare to work must have been a time consuming one. Most of them had either low skill or level of education before the time of arrival. So plenty of additional education programs, civic courses or labor orientation have came up and provided to those poorly skilled outsiders before they were able to enter the local labor market. Simultaneously, the amount of support money and the time in between arrival and entering labor market was also increased. Besides, there were others strategies of reallocating the newly arrivals into different cities and provinces all over Sweden. The immigrants were split up and dispersed for necessary reasons: Initially, the government wanted to avoid the concentration, which has always been a burden with almost every countries of the globe. By avoiding concentration, the pressure on rate of unemployment, accommodation, education or life expenses would be decreased. The immigrants would have bigger chances of learning language, finding accommodation or jobs. Moreover, these changes brought up advantages not only for immigrants but also for natives Swedish. They can theoretically avoid the hard-pressed competition that might be happening if the concentration with plenty of immigrations was not avoided. In other words, the strategy will create more opportunities for the country s civilians to gain employment and help the country to lower the unemployment rate. 2.2.4 Immigrant's impact on the economical and social performance Nowadays, the immigrants use the social assistance system extremely larger extent than before. Seriously, the dependence on the households support, civic, educational and financial assistance made deterioration for the national welfare of Sweden. At the same time, their contributions to the tax 23

system have decreased. Today, the immigrants are heavily overrepresented social allowances, housing allowances, unemployment allowances and early retirement pension. In the 80s and up to the beginning of the 90s it was possible to receive early retirement pension if an individual civilian found it difficult to find a job. As a result, the immigrants preferred to not to enter the labor market and instead, enjoy the unemployment benefit. The matter of fact that there were many people coming to Sweden, for any reasons such as refugees sending, asylum seekers or regular labor workers, many of them were trying to seek for a better life by being unmotivated/unemployed and exploit the national security network with the whole package of allowances and welfare assistance. Our factual surveys and tight investigation on the immigrants have discovered the ruthless truth that there are some individuals who has been living in Sweden for twenty years but could barely read our simple surveys documents. As the matter of fact, there is a number of people who just get themselves registered for educational support with content of several courses (Swedish language, etc), simply and only to be paid. They could have left those courses aside, failed them, and started them all over again in order to have continuous payment. Those people, and their fellow friends who are living on the assistance and welfare of Sweden and more deplorably do not pay any taxes; can be regarded as a burden for such a great host country. On the contrary, there are also outstanding civilians, whom were originally from outside of Sweden, tried their best to work out the schools, graduates and became academic workers. Moreover, many of them started and ran their own business in various fields; they must have paid high taxes, forced the labor market to have higher level of competition, created and contributed occupations for the society. Basically, the above-mentioned individuals not only were able to survive well in Sweden, but also work hard and raise the economic growth of their second country Sweden. 24

3. CONCLUSION By observing the figures more closely, it was clear that: Null hypothesis proved to be valid. By taking our sample as a representative picture for immigrants within the Swedish labor force, we could come to the following conclusion. Deviation towards the mean from far ends of each extreme dominates. More than majority of people coming here managed to adapt to the new environment better than expected. Sweden is considered as a socialistic country where the middle class dominates; the rich are paying more in taxes and even the poorest have a better living standard than most of African countries. A shift from the poorest and the richest ends of the spectrum is reallocated towards the middle. An increase of 12% from the richest and the poorest is a good evidence of the dominating working class consistency. Eight people have lost their high income and moved towards the average, at the same time as number of the lowest income earners doubled for the reasons we have mentioned earlier. Almost all of the people obtained some kind of additional education and nearly half of them had more than just one form of extra knowledge since their arrival to Sweden. All of these effects could be caused by the famous Swedish socialism. Sweden spends an enormous amount of funds on education and social security every year. This allows any immigrant that has been granted a permanent residence to participate in any schooling form. As long as the person has fulfilled potential requirements, they are free to apply to virtually any university, course or KY education. This allows them to increase their potential income by picking up new skills and increasing their knowledge. Absolutely, many cannot take a part of this but technically, it is possible to have nearly complete control of their future earnings. We arrived at this conclusion by looking at other more liberal countries like United States where most of the education costs and many immigrants do not have the same opportunities as they have in Sweden. Here however, there are many ways to improve ones economical situation by investing in education, proving once again that schooling is a wise choice of investment. 25

4. REFERENCE: Anders Böhlmark. (2007), School Reform, Educational Achievement and Lifetime Income-Essays in Empirical Labor Economics, Stockholm: PrintCenter US-AB George Borjas. (2010), Labor economics (5 th edition), Boston:McGraw-Hill Internet sources: Jan Ekberg. (2006), AMID Working Paper Series 48/2006, Retrieve April 8th From: www.amid.dk/pub/papers/amid_48-2006_jan_ekberg.pdf Swedish National Agency For Higher Education. (2004), Report 2004:37 R, Retrieved April 11 th From: http://www.hsv.se/aboutus/publications/reports/reports/2004/finallytherightplaceformeaboutthepathtak enbyimmigrantuniversitygraduatestowardsqualifiedjobsobstaclesandopenings.5.539a949110f3d5914ec 800068787.html Jan Ekberg. (2010 February), Will future immigration to Sweden make it easier to finance the welfare system? Retrieve April 15th From: www.vxu.se/ehv/filer/forskning/cafo/wps/nek_wp01_10.pdf Olof Åslund and Dan-Olof Rooth. (2003 March), Do when and where matter? Initial labor market conditions and immigrant earnings, Retrieve April 16th From: www.ifau.se/upload/pdf/se/2003/wp03-07.pdf George Borjas. (2006 January), The impact of immigrants on the labor market, Retrieved April 16th From: www.jvi.org/fileadmin/jvi_files/warsaw.../borjas_paper.pdf Rachel M. Friedberg and Jennifer Hunt. (1995), The Impact of Immigrants on Host Country Wages, Employment and Growth, Retrieved April 17th From: www.econ.brown.edu/fac/rachel_friedberg/friedberg_jep.pdf Matti Sarvimäki Kari Hämäläinen. (2009 January), Moving Immigrants from Welfare to Work The Impact of an Integration Program, Retrieved April 17th 26

From:http://personal.lse.ac.uk/sarvimak/Integration_Program.pdf Karin E Lundström. (2007), Tio år efter invandring- tre av fyra, Retrieved April 18th From: http://www.scb.se/statistik/_publikationer/le00001_2010k01_ti_03_a05ti1001.pdf Åke Nilsson. (2004), Efterkrigstidens invandring och utvandring, Retrieved April 20th From: http://www.scb.se/statistik/_publikationer/be0701_1950i02_br_be51st0405.pdf Charles Westin. (2006), Sweden: Restrictive Integration Policy and Multiculturalism, Retrieved April 22th From: http://www.migrationinformation.org/usfocus/display.cfm?id=406 27