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...s and unemployment of immigrantssWelfare state and labour market institutions are assumed to prevent the conflicting desires ofsemployers and workers from ‘balancing out’ and finding the equilibrium (=-=Esping-Andersen 1990-=-).sThis argument is often used in the discussion about the differences in unemployment rate between thesUS and Europe (Blau and Kahn 1996). It is often claimed that the relative higher rates and longe...

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...ion of immigrants issthe immigration policy of the host country (Kogan 2003; Lewin-Epstein, Semyonov et al. 2003). Thissinfluence is indirect as immigration policy may affect the skills’ composition (=-=Borjas 1987-=-) and healthsstatus among the immigrant population (Ekberg 1990). If immigration policy is strict and tailored tosmeet labour market needs, immigrants are assumed to be selected according to their ski...

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...ng risks:sinactivity, primary and secondary labour market. After organizing our data in a person-month file, wesapply a discrete-time event-history model by estimating a multinomial logit regression (=-=Allison 1982-=-).sIn this model, the dependent variable is the conditional probability that an individualsmakes thestransition into state in time pointsconditional that she/he has remained in unemployment untilstime...

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...slabour market. The acceptance of poor jobs by immigrants is believed to be caused by their ignorancesof labour market conditions of the host country, their expectation of a temporary stay in Europes(=-=Bonacich 1972-=-) and the even poorer average quality of jobs in their home countries (MacKenzie andsForde 2009). Following this reasoning, we expect quicker transitions of immigrants in the secondaryssector of the l...

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...y of the job that immigrants are able to find than to the aggregate job-finding probability (Kogans2007). Exits from unemployment to inactivity are relevant as well. The ‘discouraged worker’ problems(=-=Borjas 2005-=-) may also be relevant for immigrant-native differences.sA final issue is that most previous studies have relied on macro-level indicators of institutions.sFor example, the effect of economic incentiv...

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...ell (Nordenmark 1999). More specifically, we argue that benefits may act as a steppingsstone for the unemployed and hence disincentive effects of benefits may therefore be offset bysefficiency gains (=-=Sinn 1995-=-; Sinn 1996; Headey and Muffels 2008; Tatsiramos 2009). Unemploymentsbenefits provide financial resources, enabling job seekers to take risks. Therefore, unemploymentsbenefits will indirectly encourag...

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...d Heath 2007; OECDc). The largesunemployment gap has caused great political and public concern as it is assumed to challenge socialscohesion as well as undermine the sustainability of welfare states (=-=Zimmermann 1995-=-; OECDb). Inssome countries, immigrants have been accused of moral hazard, i.e. overusing unemployment benefitssor social assistance.sHowever, the size of the unemployment gap between immigrants and n...

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... labour market, employment protection legislation and the strictness and focus of thesimmigration policy.sUnemployment benefits: disincentives or efficiency gains?sAccording to the job-search theory (=-=Mortensen 1986-=-), unemployment benefits inevitably createsdisincentives for employment as they increase the reservation wage 2sof job seekers. Thesesdisincentives are larger for job seekers at the bottom of the inco...

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...nd workers from ‘balancing out’ and finding the equilibrium (Esping-Andersen 1990).sThis argument is often used in the discussion about the differences in unemployment rate between thesUS and Europe (=-=Blau and Kahn 1996-=-). It is often claimed that the relative higher rates and longersduration of unemployment especially in continental Europe compared to the US are caused bysinstitutions such as strict employment prote...

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...ed which is crucial for a successful jobssearch. Finally, we may expect that the job-seeker who receives benefits during unemployment maysbe less likely to make transitions into inactivity (see, e.g. =-=Addison and Portugal 2003-=-) due to thesincrease in both financial and personal resources. Therefore, the labour supply of immigrants may besaffected positively by the access to unemployment-related benefits. From this line of ...

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...006). This may increase unemployment duration for suchsworkers. By contrast, employers in flexible labour markets are assumed to be more prone to use as‘trial and error’ strategy as screening device (=-=Giesecke and Groß 2003-=-) and hence immigrants leavesunemployment easier. The effect of employment protection legislation has not been investigated insmuch detail as previous comparative studies have mainly focused on unempl...

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...ees, or if it is more lenient,simmigrants are more likely to be ‘negatively selected’ as seen from a labour market perspective andstheir labour market integration will be more difficult (Borjas 1987; =-=Chiswick 1999-=-). Perhaps mostsimportantly, in the case of a humanitarian-focused immigration policy, the immigrant population willscontain more individuals with mental and physical problems and hence more problemat...

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... these interesting cross-country differences, only a few comparative studies have beensconducted in a European context (notable examples are Kogan 2007; 2006; 2003; Kesler 2006; Cohensand Kogan 2007; =-=Fleischmann and Dronkers 2007-=-).sPrevious European studies are not only relatively scarce, but they have typically focussed onsonly one indicator of labour market integration, namely on cross-country differences insunemployment ra...

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... research reports (see, e.g. Velfærdskommissionen).sDespite these interesting cross-country differences, only a few comparative studies have beensconducted in a European context (notable examples are =-=Kogan 2007-=-; 2006; 2003; Kesler 2006; Cohensand Kogan 2007; Fleischmann and Dronkers 2007).sPrevious European studies are not only relatively scarce, but they have typically focussed onsonly one indicator of lab...

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... economic job search theory implicitly assumes that the behaviour of individual is onlysdriven by financial considerations. However, non-financial employment motivation may be relevantshere, as well (=-=Nordenmark 1999-=-). More specifically, we argue that benefits may act as a steppingsstone for the unemployed and hence disincentive effects of benefits may therefore be offset bysefficiency gains (Sinn 1995; Sinn 1996...

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...uble unemployment rates of natives (OECDc). Thesesdifferences have been interpreted as an effect of institutional differences and more specifically as asreflection of benefit generosity (Jensen 2006; =-=Holm 2007-=-). This perception not only thrives in thespublic opinion, but is also present in several research reports (see, e.g. Velfærdskommissionen).sDespite these interesting cross-country differences, only a...

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...hese workers especially in countries with flat-rate benefits 3 (Borjas 2005). Disincentive effects may therefore be more pronounced for immigrants as they tend tosbe employed in low-wage occupations (=-=Elliot and Lindley 2007-=-). Moreover, even controlling forsprevious wage, unemployed immigrants who receive generous benefits may stay longer insunemployment if they have a lower ‘taste for work’ than natives (Borjas 2005) as...

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... (Kogan 2003; Lewin-Epstein, Semyonov et al. 2003). Thissinfluence is indirect as immigration policy may affect the skills’ composition (Borjas 1987) and healthsstatus among the immigrant population (=-=Ekberg 1990-=-). If immigration policy is strict and tailored tosmeet labour market needs, immigrants are assumed to be selected according to their skills andstherefore easier to integrate into the labour market. H...