IZA Discussion Paper No. 101

This Discussion Paper is issued within the framework of IZA's research area 7KHH :HOIDUHH 6WDWHHDQGG/DERUU0DUNHWV Any opinions expressed here are those of the author(s) and not those of the institute. Research disseminated by IZA may include views on policy, but the institute itself takes no institutional policy positions. The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent, nonprofit limited liability company (Gesellschaft mit beschränkter Haftung) supported by the Deutsche Post AG. The center is associated with the University of Bonn and offers a stimulating research environment through its research networks, research support, and visitors and doctoral programs. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. The current research program deals with (1) mobility and flexibility of labor markets, (2) internationalization of labor markets and European integration, (3) the welfare state and labor markets, (4) labor markets in transition, (5) the future of work, (6) project evaluation and (7) general labor economics. IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. Labour market assimilation of Danish first generation male immigrants is analysed based on two panel data sets covering the population of immigrants and 10% of the Danish population during 1984-1995. Wages and employment probabilities are estimated jointly in a random effects model which corrects for unobserved cohort and individual effects and panel selectivity due to missing wage information. The results show that immigrants assimilate partially to Danes, but the assimilation process differs between refugees and non-refugees. * Thanks to Kraen Blume and Claus Houmann Frederiksen who have done part of the computational work. The project has been financed by the Danish Social Research Council (FREJA) and TSER. The authors want to thank members of the TSER network on 'Labour Demand, Education and the Dynamics of Social Exclusion' and seminar participants at IZA and CLS and the EALE conference 1999 for many helpful comments. 1 In this study we use the definition of a (first generation) immigrant given by Statistics Denmark and it is: An individual who is born in a country other than Denmark, and whose parents both …