Immigrants contribute to the Finnish labour market

Finland has traditionally been a country of emigration. People have left for other Western countries to find better job opportunities and have especially preferred Sweden. Finland became a country of immigration in the beginning of the 1980s when the balance of international migration switched to positive. The most noticeable wave of immigration occurred in the 1990s when Ingrian Finns received returnee-status. The reception of refugees, for example, Somalis during the first half of the 1990s, has further increased the flow of immigration to Finland.

From an emigration to an immigration country
The year 2015 represents a remarkable immigration year as Finland received a total of 32 476 asylum seekers. This was ten times higher than the previous year of 3 651 asylum seekers. Reception centres have been established all over the country for these newly arrived asylum seekers. There were 28 refugee reception centres functioning in 2014 and 212 centres in 2015. The number of those born abroad was 337 162 individuals in 2015. This represents six percent of the total population. In Finland, the proportion of immigrants is, however, small compared to other European countries, but it is expected to grow further in the future. The prevalent countries of birth have been Russia, Estonia, Sweden, Somalia and Iraq. The most common motive for moving to Finland is connected to family reasons, for example finding a Finnish spouse and facing marriage migration. International students and labour migrants also form important immigrant groups, as well as humanitarian migrants and return migrants.

Unemployment rate still high among immigrants
The position in the labour market is a central indicator of the social status of immigrants and ethnic groups and employment is thus the foundation for the successful integration of immigrants. Both in Finland and in other industrialized countries, it is more difficult for immigrants to find work than for the native population. The result is that the former often have several times higher unemployment rates than the latter. The employment rate for immigrants has improved with the economic cycle in Finland. For example, during the deep economic downturn in 1994 the unemployment rate for foreigners was 53 percent and for the total population it was 17 percent, i.e. the rate was three times higher for the former. The unemployment rates in 2014 were 27 percent for foreign citizens and 13 percent for Finnish citizens. There are huge differences in unemployment rates by citizenship: the unemployment rate for Estonians has been 17 percent, for Russians 41 percent and for Somalis as high as 73 percent in 2014. The number of employed foreign citizens was 82 188 individuals in 2014. This represented 3.6 percent of all employed. Immigrants tend to be concentrated in certain branches of activity and immigrant employment sectors showed some gender differences in the 2000s and the 2010s. Trade has been the most important sector to employ both immigrant men and women. The finance, insurance, real estate and business activity sectors have especially employed men. For women, education and research have been important, and also employment in health and social work.

Transport, communication and construction sectors have been important for immigrant men. Industry has employed many men, and the manufacture of electrical machinery has been especially important. It is clear that the proportion of the employed has grown with better education among both males and females. When looking at entrepreneurship, 11 percent of employed Finns have been entrepreneurs in 2014 but among Turks, it is very common: 37 percent of employed Turks have been entrepreneurs. Immigrants are sometimes ready to take a job not corresponding to their education just to get on the first step of the labour market and through this integrate into society. Another problem for immigrant job-seekers is that foreign degrees are not valued by employers, despite the fact that they are officially recognised. Also, learning the Finnish or Swedish language is an essential key factor for successful entry into the labour market.

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Migration decisions are often linked to economic opportunities. Economic migrants move to the host country because they want to improve their own opportunities. Migrants are unlikely to return home unless they believe their prospects there are substantially better. Immigrants who intend to immigrate permanently are less likely to return home for example during a recession. Also, strong family ties in the host country will discourage return migration. It is worth noting that many also work in sectors such as health and social services and education which are not traditionally cyclical.

Need for immigrants in an ageing society
The changing age structure of the population strongly affects the supply of labour over time. Labour leaving the labour market is not a problem if this is compensated by adequate workforce entering the labour market. In ageing societies, complementing reproduction of the population by immigration has been considered an option. Finland will need immigrants to compensate for the labour deficit due to the baby-boom generation having left the workforce during this decade and in the future. Finland needs immigrants for a variety of sectors, and competes for them with other ageing societies. In population age structure, the share of individuals aged 20–44 is greater among foreign citizens than among Finnish citizens. The immigrants are thus in a favourable working and family formation age. Immigration can be seen as the movement of human capital from one country to another and at the same time it is a part of the human capital growth. From an innovation point of view, immigration is seen as the effect of bringing new skills and abilities to the labour force (skills in work, language proficiency, foreign contacts) and modernisation (at the individual level an ability to take risks, courage, freedom from prejudice) which has influences on development trends in technology, entrepreneurship and internationalisation.

This article is a part of Nordregio News #3.16. Read the full issue here:

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