“This is the sixth consecutive quarter where the number of employed is increasing among foreign-born.....the proportion of employed among the population was 66.0 percent. Among foreign-born employment rate was 57.5 percent”
This sounds convincing, but only because it is carefully designed to mislead readers. Let's go through the tricks. First, it is hardly surprising that the “number” of employed immigrants increases, since Sweden takes in 100.000 or so immigrants every year. The employment rate has not increased for six consecutive quarters.
They include people aged 65-74 in the data. Since there are far fewer retire-aged immigrants than retired-aged native Swedes, the immigrant numbers appear better. They also don’t separate non-European immigrants (the group which has problems in the labor market) from Nordic immigrants, whom we all know are doing fine.
Instead of comparing immigrants and native Swedes they compare immigrants with the total population (which includes immigrants!). This is despite the fact that data is available for native Swedes. Fooled by this sleight of hand DN writes today: “Reality is not as dark as amongst others SD want it to appear. Statistics from SCB show that 66 percent of the native population [my emphasis] is employed. Among the foreign born the share is 57.5”
Migrationsinfo also bakes second generation immigrants into the Swedish "population total" with whom first generation immigrants are compared. It is written in a way so that an unsuspecting reader will get the impression that immigrants are being compared to natives. As can be seen DN fell for Migrationsinfo's subtle deceptive writing.
Here are less manipulated numbers from SCB 2008, reporting the share gainfully employed among the population aged 20-64:
Native Swedes with two parents born in Sweden: 84.5%
Non-European Immigrants: 51.2%
Yes DN, this is a “Fullständigt fiasco”.
Fores is not much better. They like to claim that research has shown that Somali immigration to the U.S is “successful”. Reading these myths many on the Swedish right have become convinced that the economic problems associated with immigration is entirely the fault of the Swedish model. Supposedly in countries with smaller welfare states and unregulated labor markets there are no economic problems with unskilled immigration. If Sweden would only abolish labor market protection and cut the welfare state the problem would fix itself.
I agree that LAS and generous welfare probably make integration somewhat harder. It is nevertheless incorrect to claim that free-market economies have no problem with integrating immigrants. Let's look at the employment rate of three immigrant groups who have difficulties in the Swedish labor market with in other countries using the Database on Immigrants in OECD Countries. By comparing Swedish outcomes with market-liberal countries we can test the theory that everything will be fixed by free-market reform. Some of these countries are often uncritically used as shining examples of success for Sweden to follow.
The figures refer to the number employed as the share of the 15-65 population for each immigrant group.
Immigrants from Iraq:
Sverige 29%.
Danmark 22%
Storbrittanien 42%
Nya Zeeland 40%
Australien 32%
Kanada 52%
USA 62%
Danmark 22%
Storbrittanien 42%
Nya Zeeland 40%
Australien 32%
Kanada 52%
USA 62%
Immigrants from Afghanistan:
Sverige 24%.
Danmark 18%
Storbrittanien 23%
Nya Zeeland 23%
Australien 34%
Kanada 46%
USA 54%
Immigrants from Somalia:
Sverige 24%.
Danmark 16%
Storbrittanien 15%
Nya Zeeland 25%
Australien 22%
Kanada 36%
USA 52%
Danmark 18%
Storbrittanien 23%
Nya Zeeland 23%
Australien 34%
Kanada 46%
USA 54%
Immigrants from Somalia:
Sverige 24%.
Danmark 16%
Storbrittanien 15%
Nya Zeeland 25%
Australien 22%
Kanada 36%
USA 52%
As usual the U.S does best, but no country approaches full integration. Clearly neo-liberalism is not a magic bullet which will fix immigration.
Note that flexible labor markets result in less unemployment, but not necessarily high-income. In 2010 according to the Census, the Somali immigrants in the U.S who did have jobs on averaged earned around half the native wage. A tragically high 58%(!) of Somali families in the U.S live below the poverty line.
Fores has chosen to present this experience as an paradigm of success (“framgångsexempel”) for Sweden to follow. I am not sure the voters of the Center-party would share their vision of Sweden’s future if they were aware of the true facts.
I don't know what that expression means to you, Tino, but Fores, Migrationsinfo and Centerpartiet do not advocate open borders. They want to preserve and expand tax subsidized immigration, presumably in an effort to break union power and bring down wage levels; if there indeed is a purpose. They might as well be path dependent with some sort of morality agenda.
ReplyDeleteThere is only one way to achieve open borders, and that is to clear migration from statutory barriers as well as from tax subsidies in any direction.
"By comparing Swedish outcomes with market-liberal countries we can test the theory that everything will be fixed by free-market reform"
ReplyDeleteThis statement is clearly wrong.
Even if we assume that somebody thinks 'everything will be fixed by free-market reform' this still refers to free-market reform in Sweden, and the effects of free market reforms in Sweden cannot be tested by comparing with USA.
“Even if we assume that somebody thinks 'everything will be fixed by free-market reform”
ReplyDeleteAn editoral in SVD last week stated:
"We know the cause for immigrant marginalization from the labor market. It involves a combination of barriers to entering the labor market: high starting salaries, labor market regulations, the business environment in the community and benefit levels“
The United States does not have any of these, yet unskilled immigrants do poorly in the labor market.
You prefer to make the differences appear as large as possible, Fores doesn’t. Neither is “sleight of hand”. Ages 15-74 is the standard in the Swedish measurements of the working population (AKU). Comparing a group to the total is of course also completely normal. You can hardly blame Fores if a newspaper misreads the data.
ReplyDeleteIs the difference a “complete fiasco”? Well, it could certainly be much better, and that is exactly what Fores is all about – trying to change policies on national and local level by pointing to the best examples. But it could be noted that during the period that Sweden has received so many immigrants – now 15 percent of the population – economic growth has been among the strongest in western Europe, the governments coffers are filled, the country is getting through the crisis better than most, homicides (measured per 100.000 persons) is relatively low and sinking etcetera. Yes, there is a big problem with the labor market for immigrants, but as a whole immigration to Sweden is not causing a catastrophe, as some try to tell us.
The last part of your post I find strange. You try to show that the US is not such a good example when it comes to labor market integration. But yet your numbers show a remarkable difference between Sweden and the US. No one has argued that everyone gets a job in the US. The US is a great example, and some of the reasons are probably less labor market regulation and lower minimum wages. There are probably others as well, such as stronger religious communities helping newcomers and a longer tradition of immigration.
/Andreas Bergström, Deputy Director, Fores
Sure, but USA differs in many other aspects too. Thus, it is not a test of the theory.
ReplyDelete"Ages 15-74 is the standard in the Swedish measurements of the working population (AKU). Comparing a group to the total is of course also completely normal."
ReplyDeleteJust because a statistic is a standard (in this case for reporting employment statistics) does not mean that it is appropriate for all purposes.
Age-related retirement is not a "labour market problem" in the same sense as unemployment or underemployment for able-bodied people of working age - this is not changed just because the 15-74 age bracket has been the reporting standard since 2005.
The EUROSTAT / SCB standard of measuring employment in the 15-74 age group is appropriate for some purposes, but is highly problematic for other purposes, especially for the reason highlighted in this post (the inclusion of a large group of retirement age people in employment statistics).
This can make both time series analysis and cross-population comparisons misleading if one fails to notice and point out shifts in or differences in age profiles across time or across populations.
This is one reason for why the SCB and EUROSTAT make data for multiple age brackets available.
So yes, including retired people when comparing labour market performance between the native born and immigrants can be misleading, if the difference in age profiles is not noticed and explicitly pointed out. Failing to do so will result in an overly rosy picture of the labour market situation for immigrants relative to that of the native born.
Thanks for your reply Andreas:
ReplyDelete* I am trying to give a correct estimate, while Migrationsinfo is using demonstrably flawed methods.
* The appropriate age-category depends on the purpose. Using the 15-74 is *not* optimal for the purpose you are using it for, namely estimating the labor market integrations of immigrants.
When we are interested in comparing labor-market outcomes for two groups where the age-structure differs we adjust for age. Since employment varies by age this is the academic standard as well as common sense.
Here is immigrant employment relative to native, in percentage (not percentage points), AKU second quarter 2012:
15-74: -15%
15-24: -23%
25-54: -21%
55-74: -21%
Aggregating the 15-74 population underestimates the true problem because you end up comparing retired-aged native Swedes with younger immigrants.
* “during the period that Sweden has received so many immigrants – now 15 percent of the population – economic growth has been among the strongest in western Europe, the governments coffers are filled, the country is getting through the crisis better than most, homicides (measured per 100.000 persons) is relatively low and sinking etcetera.”
You are using a logical fallacy called Post hoc ergo propter hoc. We can’t conclude that two things cause one-another just because they coincide in time, lots of other things are happening all the time.
During the period where the U.S was fighting the Iraq war the American budget deficit was declining, but less crude methods show that the Iraq war raised the deficit. Similarly by counting we can see that immigrants pay in less than they receive from the welfare state. This superior method shows that the budget would have been even better with less migration. To use another example during this period according to Brå 39 percent of male murderer suspects were first-generation immigrants. This over-representation contradicts your hypothesis that the murder rate would have been higher with less immigration.
* “The last part of your post I find strange. You try to show that the US is not such a good example when it comes to labor market integration. But yet your numbers show a remarkable difference between Sweden and the US.”
There is nothing strange as long as we separate ‘success; from ‘smaller failure’.
Even in the free-market country that does the best things are nevertheless very bad. 54% is far below levels needed to be net-contributors to the economy. This is especially true given that the wage rate is around half the native wage rate.
The U.S does least bad, and free-market policies mitigate the problem, which is why I wrote it. What the numbers prove wrong is the view that free-market policies *solve* the integration problem. The criterion for economic policy is that it is good for the economy, not that it’s slightly less bad than complete disaster.
I don’t think most Swedes consider a situation where 58% of families in an group live below the poverty rate a “successful” example for Sweden to be inspired by.
> The United States does not have any of these
ReplyDeleteI think perhaps your readers in the US might find this humorous. The US might be overall better than Sweden on many of those fronts, but it would be misleading to say it was anything more than a matter of degrees (and that it varies from state to state and city to city).
> 54% is far below levels needed to be net-contributors to the economy.
I find the phrase "net-contributors to the economy" confusing. If a worker draws no specific state benefits (though shares in non-excludable public goods) and has a consensual job (implying a mutually-beneficial relationship), then how are they not a net contributor?
> The criterion for economic policy is that it is good for the economy, not that it’s slightly less bad than complete disaster.
Could it not also have an ethical component? Wouldn't most Swedes agree that some level of state-enforced welfare for citizens is actually an ethical issue?
I certainly agree that your statistics are more representative of reality. But:
> I don’t think most Swedes consider a situation where 58% of families in an group live below the poverty rate a “successful” example for Sweden to be inspired by.
If one is looking at this as an ethical, human rights issue, this 58% number would need to be evaluated versus an alternative. The wage premium that results from moving to a developed economy from a developing economy is simply massive. This makes a 24% employment percentage in Sweden certainly sub-optimal, but judged from the perspective of the folks who obviously prefer to live in Sweden, it's an increase in human welfare.
Your point here, that being more free market than Sweden isn't magic, is well-taken, but that does not in itself recommend against opening borders on the margin. Things like your analysis of the effects of immigration on democracy and policy might recommend against that, though.
Bryan Caplan writes well on this subject: http://econlog.econlib.org/archives/2009/05/its_not_just_wh.html
Didn't see your reply until now. Shouldn't prolong the discussion about the statistics a week later, just wanted to point out that there is no "post hoc, ergo propter hoc"-fallacy in my argument, instead you are putting up a straw man. I was pointing out that the situation is not a catastrophe, or anywhere near, as some try to convince us. You left that line out in your quote.
ReplyDeleteIt doesn't become a strawman just because you claim so. You wrote:
ReplyDelete“But it could be noted that during the period that Sweden has received so many immigrants – now 15 percent of the population – economic growth has been among the strongest in western Europe”
You link high growth to rapid immigration because they coincide in time, which is indeed a "post hoc, ergo propter hoc"-fallacy.
During the last fifteen years the immigrant population has gone from 11 percent to 15 percent. During the same period GDP per capita has grown by 2.1 percent per year, or 37 percent in total.
Does the fact that these two trends coincide prove that immigration cannot have been an economic disaster? No, it doesn’t, because even rapid immigration is too small to show up in aggregate numbers in this way.
To take an extreme example, let’s assume that all immigrants earn zero. Say that the economy has 37 percent productivity growth while the immigrant population share increases from 11 to 15 percent. Income during the period would still have grown by over 30 percent even of all immigrants still earn nothing, because the immigrant share only went up 4 percentage points while growth was 37 percent.
This example shows that even huge negative effects are too small to show up in aggregate growth numbers during short periods, even if the underlying immigrant earning figures would be disastrous.
In fact, in 2010, on average immigrants earned 51% of the market income of Swedes (The relative income of immigrants compared to Swedes has declined during this period). These figures indicate that GDP growth would have been *even higher* (by almost one fifth) without any increase in the migration population share.
When the immigrant population share is still small it's dishonest to you hide negative trends for the immigrant group in positive aggregate changes in the overall economy.
This comment has been removed by the author.
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteVery important distinction made by Tino in the last comment. The only thing that Andreas Bergström is quite right about is that the murder rates remain low in Sweden and other European countries, somewhere between 0-3 per 100 000 people. In this respect it isn't any disaster so far.
ReplyDeleteAnother obstacle for the pro-immigrant left and right is that their representatives regard immigration related problems - like high unemployment rates and incriminating crime statistics - as fixable: negative trends that will eventually change if a), b), c) etcetera are being done in order to correct these palpable shortcomings.
But these "quick fixes" often presuppose that the immigration related problems are not accumulated, hence can only be dealt with effectively in a smaller scale. However, these problems, both short-term- and long-term-wise, are in fact accumulated in relation to the size and character of the immigration.
The best way to describe immigration in this sense is by the size of its impact on society (which can be both positive and negative or somewhere in between), and when it comes to third world immigration, the impact tends to be negative. Thus the problems in Sweden will not be solved gradually but rather increase simultaneously, in regard to the influx rate of the immigration from south.
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