OECD. Another Panel of Experts I Can’t Use.
Posted by Exile on March 18, 2007
I have a certain dislike of so-called experts that feel the need to tell us what we are or are not doing correctly. Their approach is purely subjective and is often off the mark.
One of those i really have the highest disdain for is the OECD. The Organisation for Economic Co-operation and Development in Europe. Or, as I like to call it, the Organisation for the Economic Collapse of Denmark. A collection of social democratic economic know-it-alls that have only one goal in life. To further the social democratisation of Europe. Recently they took Denmark to task on the employment figures for immigrants and their children in Denmark. Harking back over the last 30 years and not quoting any data from the last five, the OECD has come to the following conclusions:
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.
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.
Let us look at paragraph 2 for a moment. They are correct in the statement that immigration has been strongly dominated by refugees and family reunification. Read “economic refugees”. I emphasise that point by referral to the next point concerning welfare benefits; “…Denmark’s relatively high social benefits”. In other words, if you don’t want to work, you can make a healthy living by importing your family and having many children. More dependents, more money. The lowering of these benefits has helped no end, forcing the unwilling to seek employment.
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 not yield as large an impact on employment probabilities as one would expect, even if the qualification is obtained in Denmark. The second generation is now gradually entering the labour market in larger numbers, and this group is of particular policy concern. Their educational attainment is well below that of comparable Danes without a migration background. This is mainly due to the fact that the dropout rates from vocational training for the second generation are more than twice as high as among persons of Danish origin. This, in turn, is at least in part attributable to the fact that persons with a migration background have more difficulties getting apprenticeship contracts with companies than comparable persons of Danish origin. There have been a series of recent measures to address this issue.
However, even for those with upper secondary or tertiary education, employment rates of the second generation are significantly lower than for the native-born. This also holds for the offspring of immigrants from the OECD.
“Their educational attainment is well below that of comparable Danes”. Followed by – “the dropout rates from vocational training for the second generation are more than twice as high as among persons of Danish origin.” Basically, this is understandable. No one in Denmark is going to employ someone who can’t read or write. No matter where you come from. I speak from experience. Coupled to that, you cannot complete a vocational training programme if your acedemic skills are under par. The question must be, why are immigrant children under-achievers? Address that, and you may find an answer.
About one third of total Danish employment is in the public sector, where immigrants are underrepresented, although the degree of underrepresentation seems to be lower than in other OECD countries. Indeed, a variety of measures have been taken to increase immigrants’ employment in this sector, because of its size and importance in the Danish context. The public sector is also viewed as having a role-model function. Private employment is largely dominated by small- and medium-sized enterprises, but immigrants do not seem to be less present there than in large companies – in contrast to other OECD countries.
Correct. In the company where I work, about 40% of the workforce is immigrant. Myself included. Hardly underrepresented if you remember that the immigrant population of Denmark is about 7%. The public sector is another thing entirely. Old widow Jensen doesn’t like being confronted by foreigners when she has to go to the local authorities concerning her pension or private matters. She wants to speak to a fellow Dane who understands both her needs and culture.
Considering the recent nature of most immigration, and the relatively small size of the immigrant population, the overall framework for integration in Denmark is highly developed and a significant amount is invested in integration efforts. This is mirrored by the fact that Denmark is among the few OECD countries which has a separate Ministry for Refugee, Immigration and Integration Affairs, in which immigration and integration policies are considered together. Under this framework, municipalities have to offer a three-year introduction programme to immigrants from outside the European Economic Area, which consists of language courses and a range of labour market integration measures. Indeed, the strong emphasis on labour market integration in the introduction programme is particularly noteworthy. There are strong financial incentives for municipalities to achieve rapid labour market integration of recent arrivals, and an elaborate benchmarking system is in place to monitor municipalities’ integration performance and facilitate the mainstreaming of effective policies.
Read, positive discrimination. “There are strong financial incentives for municipalities to achieve rapid labour market integration of recent arrivals.”
There is some indication that current policies are having the desired effect, as labour market participation and employment of recent arrivals have increased. However, the unemployment rate for this group has also increased and it is getting lower social assistance. One way to escape from the resulting marginalisation is via self-employment, but few immigrants seem to succeed in pursuing this route. This may be linked with the fact that immigrants generally do not have access to loans before they acquire permanent residence, and requirements for permanent residence have been tightened. There is thus a case for better loan access for this group.
If I want to borrow money for anything, I have to put up collateral to guarantee the repayment. This is not particular to anybody. It is normal monetary practise. When I first arrived here I had to establish myself at the bank and the workplace. I didn’t feel the need to be treated differently from anybody else. But if you can find me a bank that will loan me money with no guarantees of repayment, then I have a Lamborghini and a huge house to discuss with them.
What is especially striking in the Danish context is the fact that employment gaps relative to the native-born are across-the-board – they are longstanding and they are found for both OECD and non-OECD immigrants and even for offspring of immigrants from both OECD and non-OECD countries, at all attainment levels. Even returns to Danish education are lower for children of immigrants than for children of non-immigrants. Outcomes seem to be improving recently, but the general backdrop remains. Some of this may be attributable to the fact that foreign qualifications and experience may not be recognised by employers in Denmark, as is generally the case elsewhere as well. But this should not be the case for offspring of immigrants born and educated in Denmark, who show poor performance relative to children of non-immigrants at all attainment levels.
The OECD would like the less qualified to be employed over the more qualified merely because of their immigrant background? Nonsense. It will never happen.
In any event, the inadequate results for the second generation, whatever the geographic origin or qualifications of persons in this group, suggests that the benefit disincentive explanation often advanced for low immigrant employment rates is not an entirely satisfactory one. A mix of less developed personal networks, information asymmetries and discrimination seems to be part of the answer. These are generally difficult to disentangle as the former in practice have the effect of excluding equally skilled immigrants from certain jobs even where there is no ostensible discrimination. Nevertheless, testing results in the past have shown that immigrants and their children were, not infrequently, selectively ignored in the recruitment process, even when they had similar characteristics as native Danes. This phenomenon undoubtedly still exists. It needs to be more regularly monitored and publicised, and measures to diversify recruitment channels should be encouraged.
Ah yes. I wondered when this would come up. The racist card. Let’s look at this one. The immigrant population is 7%. Which means that when applying for any job, proportionally at least, out of 100 applicants, only 7 of the applicants will be immigrant. Chances? about 14-1 against. Not good odds to start with. Could this have anything to do with it?
Given Denmark’s relatively high entry wages, the relative lack of networks and the information asymmetries about immigrant skills and qualifications, which may be more
important in the Danish context with its recent immigration experience, one would expect measures which help to overcome hiring reticence and enable employers to evaluate immigrant skills to be particularly effective. Indeed, empirical evidence shows that company-based training and wage subsidies to employers have a strongly positive effect on labour market integration. Yet, relatively few immigrants profit from such measures currently. It is thus recommended to increase the scale and scope of these tools. First steps in this direction have recently been taken. There are also a variety of innovative networking projects in place which seek to set off this immigrants’ lack of access to networks, including a nationwide mentorship project, and these benefit from a strong involvement of the civic community.
So the OECD’s answer to all our problems is more wage subsidies. Despite the fact that it doesn’t work. I quote: “relatively few immigrants profit from such measures currently”. Never mind the problem, throw more money at it.
My money. My hard earned pay taken from me in taxes.
Whatever happened to letting the best man win? I wouldn’t want a job that was bought for me by the government. It would offend me. If I can’t do it on my own two feet, then I’ll go elsewhere, thankyou.
Others would do well to feel the same way.
I believe in free markets. Level playing fields and equal opportunity. I do not support handouts or positive discrimination. The thing one has to do is take the opportunities that arise and run with them, wether they be educational or proffessional. No-one is excluded from education in Denmark. People can freely educate themselves to the n’th degree here. However, there are some things that are beyond our individual grasp and that thankfully is what allows society to exist on all levels. Some will rise to the top, others won’t. Most of us will remain somewhere around the middle. We can’t all be CEO’s. We won’t all be sewage workers. (No offense to them!) Some won’t make the grade. These are the inherent differences in society. The OECD should remember that.
Can’t make it here? Then go somewhere else. Don’t expect a free ride. I didn’t.