Exit from the labour market among immigrants

The report describes the exit from employment among immigrants 50-66 years old with more than 10 years as inhabitants in Norway. They are compared with non-immigrants.

The employment rate decreases for both immigrants and non-immigrants by increasing age for those more than 50 years old. Reaching the early retirement age of 62 there is stronger drop in the employment rate for both groups. For those 50-61 years old one need a medical diagnose to receive a welfare benefit that is intended to compensate for the lack of income from work.

The employment rate for those 50 years old was 69 per cent for immigrants compared to 85 for non-immigrants. Up to 61 year of age the employment rate decreases somewhat more for immigrants. From being 61 to 62 years old the drop in the employment rate is however much larger among non-immigrants. In 2008 the employment rate for immigrants decreased by 4 percentages while it dropped by 10 percentages for non-immigrants. This is probably because the immigrants in average have fewer years as employed in Norway and therefore the pension will be relatively lower than for non –immigrants.

In 2011 Norway had pension reform which gave an opportunity to workers in many private companies to receive a full early contractual retirement pension from the age of 62 while still continuing to work. Before 2011 this pension would be reduced according to the number of hours they continued to work. The pension reform also introduced some other incentives for not retiring from work. This applied to all employed persons. The impact on the employment rate of this reform was strongest for non-immigrants. But still the employment rate is reduced more for non-immigrants than for immigrants when you compare the rate for those 61 and 62 years old. In 2013 the employment rate gap between the two groups was 12 percentages compared to 10 percentages before the pension reform. For each age group 62-66 years the employment rate continues to decrease more for non-immigrants than immigrants. So at the age of 66 the gap is 5 percentages.