The effect of immigration on the Dutch labour market

This thesis studies the effects of immigration on the Dutch labour market. The focus will be on the characteristics of the immigrants. Issues like: skill level or the duration of the stay both have their impact on the actual labour market effects. This thesis is guided by the following research question: What are the effects of immigration on the Dutch labour market? Whereas other studies (Roodenburg 2003) calculate the labour market effects for three different skills of immigrants this thesis pays more attention tot the characteristics of immigrants. These characteristics are studied by using the Human capital (HTC) and Dual Labour market theory (DLT). The actual labour market effects are studied in a qualitative way. This thesis first provides an overview of the Dutch labour migrations introduces the immigration topic and will also be used to test the HCT and DLT. Chapter one presents the immigration figures with regard to the: motives, age, gender, origin and education of immigrants. Most information in this chapter has been obtainend from the CBS database. An analysis of the Dutch labour market is next. By combining labour market analyses of the MEV, RWI, SZW and CBS an overviewof the expected labour market developments is presented. The labour market analysis underlined the importance of the proper labour market characteristics of immigrants. The HCT and DLT are the selected theories to analyse the characteristics of immigrants. Both theories oppose each others predictions. Were the HCT expects mainly young, healthy and high educated immigrants to enter the Dutch market, the DLT expects immigrants to be temporary low educated (guest workers). After linking the predictions of both theories to the data in chapter one the immigrant profile of the DLT turned out to have the best fit. However, both theories only seem to apply on part of the migration flow. In fact the immigrant profile that has the best fit with the reality seems to be a combination of both theories. The average migrant is low skilled and unlikely to return to his homecountry. When using this immigrant profile immigration will mainly affect the labour marktet position of low-educated residents. Given the expected entrance of Bulgarian an Romanian immigrants more immigrants are likely to match this profile in the future. Low skilled residents will have limited labour market opportunities as a result. Immigration has the most effect on residents with equal characteristics as the immigrants (De Beer 2007) Employers on the other hand can benefit from an increase labour pool. This allows them to select more productive workers. At this moment mainly the citizens from the sending countries and the employers in the receiving countries seem to benefit from the migration. However, one should not forget that an increased prosperity in countries like Poland or Romania will on the long run be beneficial for the Dutch economie as well, as this creates new market.