Ethnicity, job search and labor market reintegration of the unemployed

This paper seeks to shed further light on the native‐migrant differences in economic outcomes. The aim is to investigate labor market reintegration, patterns of job search, and reservation wages across unemployed migrants and natives in Germany.

The paper is based on the IZA Evaluation Dataset, a recently collected rich survey of a representative sample of entrants into unemployment in Germany. The data include a large number of migration variables, allowing us to adapt a recently developed concept of ethnic identity: the ethnosizer. The authors analyze these data using the OLS technique as well as probabilistic regression models.

The results indicate that separated migrants have a relatively slow reintegration into the labor market. It can be argued that this group exerts a relatively low search effort and that it has reservation wages which are moderate, yet still above the level which would imply similar employment probabilities as other groups of migrants.

The findings indicate that special attention needs to be paid by policy makers to various forms of social and cultural integration, as it has significant repercussions on matching in the labor market.

The paper identifies a previously unmapped relationship between ethnic identity and labor market outcomes.