By Annika Elwert, Henrik Emilsson and Nahikari Irastorza
In 2008, Sweden opted for a radical change in its labour migration policy. The new law provided all foreign-born individuals with a job offer the right to migrate to Sweden. The government reduced its ambition to control and manage labour migration and transferred the power to decide who can migrate to individual employers, arguing that employers know best what skills are needed in the labour market. Furthermore, in contrast to previous legislation, trade union influence was sidestepped in any substantial sense. Consequently, everyone who was given a non-binding offer with a liveable wage, in line with Swedish collective agreements could either migrate to Sweden or, in the case of asylum seekers living in Sweden, change tracks to the labour migration program.
By introducing this change in policy, Sweden went against international trends. The basic objective of most labour-migration regimes is to cover labour shortages while trying to avoid potential negative effects for the population living and working in the country. By neither establishing a quota or limit on the number of migrants allowed to come to Sweden per year nor selecting migrants based on their level of education, the government opted for a ‘pure’ demand-driven labour-migration policy.
The introduction of this laissez-faire labour-migration policy provides an excellent framework to study what happens when state control is withdrawn to a minimum and employers and potential employees are left to regulate migration flows. In an article forthcoming in Migration Studies, we analyse the effects of this policy reform on the income of non-EU labour-migrant cohorts who arrived before versus after the implementation of the bill.
Empirical evidence on the effects of labor-migration policy reforms is surprisingly scarce, especially in Europe. Most existing studies have focused on traditional settler states like New Zealand, Canada, and Australia, where elaborate selection systems are in place for immigrants. These studies often conclude that careful screening and selection improve the human capital of labor migrants, resulting in better labor-market outcomes. Denmark’s policy experiment with a points-based system in 2007 for attracting highly skilled migrants yielded disappointing results, with many highly skilled foreigners ending up in lower-skilled occupations. Previous studies on the 2008 Swedish labour policy reform show an increase in the number of labor migrants. The fact that many of them ended up in lower-skilled jobs led to concerns about mismatches between educational levels and host labor market needs. These studies also suggest instances of fraud and violations of labour migrants’ working conditions.
Our findings confirm previous studies and provide evidence on the causal effects of the 2008 labor migration reform on labour migrants’ average educational level and job income. The reform led to compositional changes among labor migrants: post-reform labour migrants had lower education and ended up working in lower occupational levels, which often had a surplus of workers. There was a substantial decrease in the mean income for labor migrants who arrived in the years after the reform compared to those who arrived before the reform, whereas it increased slightly for non-EU migrants who moved to Sweden for reasons officially unrelated to work. While the overall effect appeared to be driven by changes in the composition of labor migrants, there were significant effects even within educational and occupational groups. For occupations requiring a higher education, the reform opened the possibility to recruit employees at a lower cost.
These findings reveal that the 2008 Swedish labor-migration policy reform had some unintended consequences and highlight the importance of state interventions in ensuring orderly and fair labor-migration regimes and preventing irregularities and exploitation. The Swedish case serves as a valuable case study in the ongoing global discussion about the effects of labor-migration policy reforms and their implications for migrant populations and the labour markets of receiving countries alike.
This blog is based on the following article:
Elwert, A., Emilsson, H. and Irastorza, N. (accepted) “From State-Controlled to Free Migration: The Income Effects of the 2008 Swedish Labour-Migration Reform”, Migration Studies.
Annika Elwert is Associate senior lecturer at Associate senior lecturer at the Department of Sociology, Lund University.
Henrik Emilsson is Associate senior lecturer at the Department of Global Political Studies and a senior researcher affiliated to the Malmö Institute for the Study of Migration, Diversity and Welfare, Malmö University.
Nahikari Irastorza is Associate Professor at the Department of Global Political Studies and a senior researcher affiliated to the Malmö Institute for the Study of Migration, Diversity and Welfare, Malmö University.