Job separation rates of immigrants and natives in the UK during the Great Recession

The purpose of this paper is to assess the probability of job separations of immigrants and natives in the UK before and during the economic crisis of 2008.

A mixed proportional hazard duration model with a semi-parametric piecewise constant baseline hazard is used on a data sample of inflows into employment.

It is found that the crisis increased the probability of exits to unemployment for all groups, while immigrants from the new countries of the European Union seemed to have the lowest hazard towards unemployment even after controlling for their demographic and labour market characteristics. More specifically, even when we account for the fact that they tend to cluster in jobs that are most vulnerable to the business cycle, they are still less likely to exit dependent employment than natives. However, this migrant group is adversely affected by the crisis the most.

Possible implications of out-migration of the lower performers are discussed.

This paper makes use of the panel element of the UK Quarterly Labour Force Survey, and uses duration analysis on the individual level to assess the labour market outcomes of natives and immigrants in the UK.