Reports 2013/40

Immigrant poverty dynamics

An empirical evaluation for the period 1993-2011

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  • There have been substantial changes in the demographic composition of immigrants residing in Norway over the period 1993-2011. Nevertheless, we find that the overall poverty rate in the immigrant population has remained fairly stable over the years 1993-2011. It is only among immigrants from Eastern Europe we find a significant decline in the proportion of poor over this period.
  • The poverty rates decline by years since migration in Norway, and for several of the groups we find that the poverty rates are cut in half over the first five years of their residence in Norway. After the first five years the poverty rates stabilize at around 12 to 20 percent for immigrants from Asia, Africa, and South America, around 5-10 percent for immigrants from Eastern Europe, and around 3-5 percent for immigrants from Western Europe, North America and Oceania.
  • Changes in the poverty rates over time can be decomposed into changes due to (i) changes in the share of individuals going into poverty (entry rates) and (ii) changes in the share of individuals that go out of poverty (exit rates). Our estimates show that the proportion remaining in poverty over two consecutive years (i.e. 1 – the exit rate) was at about 55-60 percent for immigrants from Asia, Africa and South America, with an entry rate about 10.6 percent. For persons without an immigrant background about 40 percent remain in poverty over two years while the entry rate is about 1 percent.
  • Our results reflect a substantial degree of state dependence in poverty among immigrants from Asia, Africa and South America, estimated between 20.3 and 26.8 percent. These estimates imply that if a group of randomly selected immigrants are poor one year, this in itself increases the probability of being poor in the following year by 20.3 to 26.8 percentage points.
  • Our results for the so-called reference groups, drawn from the general population so that the distribution of observable characteristics such as age, gender, and education for such a group is similar to the distribution of these characteristics in an immigrant group, shows that the differences in the distribution of observable characteristics only to a very limited extent contribute to differences in state dependence in poverty across groups.

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