Unemployment at a Young Age and Later Unemployment in Native Swedish and Immigrant Young Adults

Abstract

The youth unemployment rate is increasing in many countries and unemployment affects future work participation. Immigrants have more difficulties than natives in succeeding on the labour market. This study examined the long-term effect of unemployment on future unemployment in Sweden. All immigrants born during 1968-1972 and a random sample of native Swedes of the same age are included. The follow-up period was 15 years, 1993-2007. Unemployed individuals had an elevated risk of unemployment during follow-up. The risk of unemployment increased with the length of unemployment in 1992. Immigrants had a higher risk of unemployment both at baseline and follow-up compared with native Swedes, but followed the same pattern as native Swedes when exposed to unemployment. For individuals with ≥100 days of unemployment in 1992, participation in an Active Labour Market Program (ALMP) increased the risk of future unemployment, whereas both higher educational level at baseline and attainment of a higher educational level between 199 3 and 1997 decreased the risk. In addition to the human suffering caused, this can result in increased welfare payments and loss of productivity and tax income to a society. Immigrants seem not to be more vulnerable to unemployment than native Swedes.