The price of being an outsider: Labour market flexibility and immigrants' employment paths in Germany

Abstract

This article attempts to answer the question to what extent recent reforms aimed at flexibilizing the German labour market affected immigrants and how this explains the (in)stability of their employment paths. Based on the 1996-1999 and 2001-2004 German micro-census panels, we focus not only on transitions from employment to unemployment and vice versa, but also on the type of employment, either open-ended or fixed-term. Dynamic random effects models explore the effects of the employment status in the preceding year on the employment status in the subsequent one for various groups of immigrants. Results confirm the more precarious nature of immigrant employment with a more frequent mobility in and out of unemployment, a more pronounced incidence of fixed-term employment and a higher instability of open-ended jobs. © The Author(s) 2011.