The Transferability of Human Capital and Migrant Incorporation Strategies in the Swedish Labor Market: A Sequence Analysis

Abstract

Migrants benefit differently from their educational credentials depending on their origin. We use the case of Sweden to study the strategies that migrants adopt to overcome barriers keeping them from fully using their education in the host society's labor market. We used administrative register data on employment, self-employment, unemployment, parental leave, and education to classify nine-year-long labor-market sequences of a cohort of migrants. Optimal matching and cluster analysis yielded five sequence types from which incorporation strategies can be inferred. We studied how institutional barriers to the transferability of human capital moderate the association between education and sequence type. We found that the association between education and the probability of each labor market sequence type depended on the institutional dissimilarity between origin and host country, even when linguistic dissimilarity and cultural dissimilarity were accounted for. Favored by supranational institutional arrangements that standardize educational credentials, migrants whose origin country was a member of what later became the European Higher Education Area avoided inactivity by converting their human capital into early employment. In contrast, highly educated migrants from other parts of the world tended to first obtain Swedish educational credentials before entering the labor market. Strategies based on self-employment were not related to education regardless of migrant origin and resulted in much lower earnings. Our findings show that differences in the transferability of human capital can produce diverse incorporation outcomes by shaping which strategies migrants adopt to navigate the context of reception.