Essays on Immigrants and Institutional Change in Sweden

This thesis consists of three self-contained essays about immigrants’ experiences in Sweden. They all focus on the interaction between institutional settings and effects on immigrants’ economic conditions. Essay I examines the effects of changed eligibility rules for disability pension in the 1979 Swedish pension reform on immigrant retirement behavior. The reform made disability pension in the form of basic pension available to a wider group of immigrants. Before the pension reform, the eligibility for a basic pension for foreign citizens living in Sweden was dependent on bilateral and multilateral agreements on social security between Sweden and other countries. Thus, immigrants who were not covered by any of these agreements had no access to a basic pension before the reform. Through the reform, all foreign citizens residing in Sweden were made eligible for a basic pension after a short qualification period. The results indicate a substantial impact on the retirement rate with disability pension on the immigrant group that was made eligible for a basic pension by the reform. These findings confirm previous research showing that the size of the benefit levels in the pension system affects early retirement behavior. Essay II analyzes the impact of the Swedish taxi and bus deregulations on the differences in labor earnings between Swedish born and foreign born workers in these sectors. The changes in the gap in labor earnings that are due to the deregulation are estimated. The results show that there was no significant decrease in the differences in labor earnings between Swedish born and foreign born workers in the bus sector as a result of the 1989 deregulation. As regards the taxi sector, the results show that, before the deregulation, there were only small differences in labor earnings between Swedish born and foreign born workers. After the deregulation, the real labor earnings of foreign born workers decreased substantially more than those of Swedish born workers. However, there was a larger increase in the inflow of foreign born workers than of Swedish born workers into the taxi sector after the deregulation, which may have changed the composition of immigrant workers in this sector. Essay III investigates the impact of becoming a Swedish citizen on annual labor earnings. The study finds a positive impact of naturalization on labor earnings, in particular for immigrants originating from Africa and Asia, an effect than cannot only be attributed to selection into citizenship. A clear trend of increasing labor earnings during the years before becoming a Swedish citizen is found. This trend also continued during the years after citizenship acquisition. The study also suggests that the effects of naturalization on labor earnings are larger for men than for women, and larger for individuals with very low income