The Labour Market Integration of Immigrants in Denmark

This series is designed to make available to a wider readership selected labour market, social policy and migration studies prepared for use within the OECD. Authorship is usually collective, but principal writers are named. The papers are generally available only in their original language – English or French – with a summary in the other. The opinions expressed and arguments employed here are the responsibility of the author(s) and do not necessarily reflect those of the OECD The author wishes to thank all interlocutors during the 2006 missions to Denmark, as well as the ELSAC Committee and the seminar participants, for their valuable information and fruitful discussions. SUMMARY 1. The labour market integration of immigrants has been a key issue both in the public debate and on the government agenda in Denmark, triggered by unfavourable employment outcomes of immigrants – the gaps in employment rates of immigrants compared to the native-born are among the highest in the OECD – and a rapid rise of the immigrant population during the past twenty years. Prior to the 1980s, immigration to Denmark was a very marginal phenomenon. Despite the rapid growth since then, with less than 7% immigrants in the population, Denmark still has one of the smallest immigrant populations in Western Europe. 2. Labour market outcomes for immigrants have been significantly below those of the native-born for more than two decades. This is partly attributable to the fact that immigration to Denmark has been strongly dominated by refugees and family reunification – groups whose labour market outcomes tend to be not as good as the native-born or economic migrants in all countries, particularly in the early years of settlement. Since 2001, lower social assistance has been introduced for all persons who have been in Denmark for less than seven out of the past eight years because of concerns about the impact of Denmark's relatively high social benefits on work incentives. In addition, participation in integration measures has been made obligatory. Finally, for more than a decade, there have been efforts to improve the labour market integration of immigrants, and these efforts have been enhanced recently. 3. However, the observed unfavourable labour market outcomes are not confined to non-OECD immigrants. Employment rates of immigrants from OECD countries are low in international comparison as well. In addition, a substantial part of the immigrant population in Denmark has tertiary educational attainment, yet this characteristic does …