An Equilibrium Search Model of the Labor Market Entry of Second-Generation Immigrants and Ethnic Danes

46 Pages Posted: 16 Mar 2013

See all articles by Nabanita Datta Gupta

Nabanita Datta Gupta

Department of Economics and Business, Aarhus University; IZA Institute of Labor Economics

Lene Kromann

University of Southern Denmark - Department of Business and Economics; Copenhagen Business School - Center for Economic and Business Research (CEBR)

Abstract

Using a search model for Danish labor market entrants, we are one of the first studies to test whether second‐generation immigrants have the same job‐offer arrival and layoff rates as ethnic Danes have. We contribute to the search literature by incorporating matching as a way to ensure sub‐sample homogeneity. Thus, we match second‐generation immigrants to their ethnic Danish twins on the basis of parental characteristics and informal network quality. There are big differences before matching, but after matching, second‐generation immigrants perform as well or better than their ethnic Dane counterparts do on the labor market, though not with respect to layoffs. This result is mainly driven by the group of high school graduates and those with a primary school education only. Second generation immigrants with vocational education, males in particular, face both significantly lower arrival rates when unemployed and significantly higher layoff rates than those of their ethnic Danish twins.

Keywords: firm behavior, equilibrium search model, matching, second‐generation immigrants

JEL Classification: J15, J61, J71

Suggested Citation

Datta Gupta, Nabanita and Kromann, Lene, An Equilibrium Search Model of the Labor Market Entry of Second-Generation Immigrants and Ethnic Danes. IZA Discussion Paper No. 7257. Available at SSRN: https://ssrn.com/abstract=2234279

Nabanita Datta Gupta (Contact Author)

Department of Economics and Business, Aarhus University ( email )

Fuglesangs Allé 4
8210 Aarhus V
Denmark
+45 87165207 (Phone)

HOME PAGE: http://pure.au.dk/portal/da/ndg@econ.au.dk

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Lene Kromann

University of Southern Denmark - Department of Business and Economics ( email )

DK-5230 Odense
Denmark

Copenhagen Business School - Center for Economic and Business Research (CEBR) ( email )

Porcelænshaven 16F
Frederiksberg, Copenhagen DK-2000
Denmark

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