Knotz, Carlo M., Flavia Fossati and Fabienne Liechti

Explaining the lacking effectiveness of labor market integration programs for workers with immigrant backgrounds: The role of cognitive shortcuts in recruitment
2024

Many countries use active labor market programs (ALMPs) to improve the labor market outcomes of workers with immigration backgrounds. Empirical findings on these programs’ effects are mixed, however. We shed new light on the mechanisms behind the lacking effectiveness of ALMPs in countering immigrant workers’ labor market disadvantages by arguing that the relevance of ALMPs for an open position is typically difficult for employers to evaluate. As a result, employers are willing to expend the necessary effort only when hiring for positions of high criticality to their businesses. It is exactly these positions, however, where workers with immigration backgrounds face the greatest degree of discrimination in hiring, and their applications are thus less likely to be given close enough consideration for ALMPs to matter. Positions where discrimination is less pronounced, on the other hand, are typically not of sufficient criticality to employers to warrant an evaluation of the relevance of ALMPs. We provide empirical evidence for our argument by using original vignette experiments administered to an online panel of employers in Germany, Sweden and the United Kingdom in 2019 and thus are able to expand on previous research stemming mainly from Switzerland. Finally, we discuss the implications of our findings for public policy and show how programs that are created to help the social and economic integration of immigrants can fail to attain their goal.