The Labor Market Outcomes Of Immigrants [Infographic]

In several OECD nations, including the United States, immigrants are less likely to be unemployed than people born in the country. For other OECD members, the opposite is true and native-born populations are outperforming migrants in the labor market. While Anglophone countries and Latin American nations tend to produce better outcomes for immigrants concerning unemployment, this rule is not absolute.

According to information in the recently released OECD International Migration Outlook 2023, the unemployment rates of immigrants are below those of native-born populations also in Australia, New Zealand, Chile, Colombia, Costa Rica and Slovakia. The biggest gaps in favor of immigrants were recorded in Costa Rica and Chile, with immigrants’ unemployment rate being 1.5 percentage points lower as of the most recently available data.

Latin American countries might lack the social safety nets of more developed nations while at the same time offering more opportunity for and easier access to self-employment and informal labor. Yet, not all of them see immigrants overperform in terms of unemployment. Despite offering most of the same labor market characteristics that might prove beneficial to immigrants, Mexico had a migrant unemployment rate 1.1 percentage points higher than that of native-born Mexicans most recently. While Slovakia saw more migrants employed than native Slovakians, this wasn’t true in neighboring Czech Republic, Hungary and Poland.

Overall, the data shows that gaps in labor market achievement tend to be bigger if unemployment is higher. Sweden, for example, saw the biggest positive unemployment gap (in favor of the native-born population) out of the 38 countries in the survey—at more than 11%—while also experiencing the 8th highest general unemployment rate. Spain recorded the highest unemployment of the group and the second-highest positive unemployment gap of immigrants. Costa Rica, however, had the third-highest unemployment rate and the biggest negative unemployment gap of migrants (meaning they outperformed native-born people), again showing the different outcomes in Latin America.

Tight labor markets help migrants

The OECD confirms that tight labor markets tend to work in favor of migrants, as do larger city environments. Another factor is a country’s immigration policy, where high quotas for work visas can render more employment of migrants. This is in fact an area in which Anglophone nations are more active in comparison to Western European countries, even though a high work visa ratio did not render the same positive effect on migrant unemployment in Eastern Europe as well as in Canada.

The Covid-19 pandemic also played a role as immigrants were more likely to become unemployed because of it. More rigid labor market regulations and more strictly regulated institutions can also have a negative effect of migrants’ unemployment, potentially explaining the situation in Northern and Western European countries. The author of a report out of the U.K. points out that discrimination is also contributing to negative labor market outcomes for migrants.

As in other groups within populations, low education levels are a major factor in creating a higher risk of unemployment for migrants. Despite still lagging behind in the OECD overall, the unemployment gap of migrants has improved by at least 2.5 percentage points since 2019.

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Charted by Statista