Overview

Objectives
This research investigates the relationship between experiencing unemployment and return migration, in particular, whether unemployment leads to departure. It explored to what extent unemployment affects the decisions of migrants to return to their home country, and also looked into whether re-employment increases the chance of immigrants staying. In addition, the study looked at how the effect varies by the duration of unemployment and re-employment. Quantifying the effects of time spent unemployed on the decision of migrants to return to their source country is relevant to current debates about the financial costs, in terms of the state's social welfare bill, of “failed” immigrants. Such debates also usually ignore that the labour market fortunes of these immigrants can be reversed; i.e. do not consider the effects of re-employment.

Methods
A unique administrative panel was used (government records over time) for the entire population of recent immigrants to the Netherlands covering the years 1999-2007. The Dutch immigrant register is based on the legal requirement for immigrants to register with the authorities upon arrival. EU-citizens are required to register in The Netherlands. Another important feature of those data is the motive for immigration is also recorded by the authorities upon arrival of the migrant.

The sample of analysis comprised of over 94,000 labour immigrants. This data was used to model the relationship between the time spent by immigrants in the Netherlands and individual labour market shocks (such as loss of a job). The reverse causation between unemployment and return migration was taken into account, i.e. whether unemployment leads to departure or whether emigration plans lead to unemployment. In addition, the time it takes for an immigrant who experienced unemployment to leave the host country was examined.

Findings
This study found that the majority of recent labour immigration to the Netherlands is temporary, and that British immigrants are the largest recent labour immigrant group in the Netherlands.

Across all immigrant groups, there is evidence that unemployment leads to return migration. Moreover, getting a job after a spell of unemployment delays the return of migrants back to the country of origin. This is true for migrants from all the groups of countries we looked at except for those from the new EU countries (mainly Poland).

The longer the migrants are unemployed the higher the chance that they will leave. For migrants from non-EU DCs the effect of unemployment on the return decision is smaller and decreasing with the length of the unemployment spell. The impact of re-employment following an unemployment spell is larger for longer employment spells; i.e. the longer the re-employment spell the less likely recent labour immigrants would leave. The timing of the unemployment spell and immigrants' characteristics play a relatively small role in explaining the time a labour migrant remains in the Netherlands.