The Life-cycle of Migrants and Natives in the Danish Experience

The aim of this paper is to analyze different outcomes such as occupation, income, health and education over the life-cycle and across generations of migrants from different origin countries and natives.Understanding the life-cycle profiles of migrants and natives represents a crucial piece of information for policy makers. However, it is a challenging task since it is difficult to obtain a complete overview of their characteristics and economic choices. The Danish administrative data offers an exceptional opportunity for studying individuals’ life-cycle trajectories for several reasons. First, it is possible to combine the high-quality administrative register datasets collected by Statistics Denmark (which has full coverage of the entire population living in Denmark during the period 1980-2013) and to match the employees to their correspondent firms’ characteristics. Second, the completeness of the information is guaranteed by the fact that Denmark does not have a significant informal sector. Third, tracking every person in the Danish economy and administration over time gives the possibility to study the life-cycle profiles not only for the first generation of migrants but also for subsequent generations.Inspired by the work of Chetty et al. (QJE, 2014) and Abramitzky et al. (AER: Insights, 2020) on the US, we study the mobility across generations and analyze whether Denmark is a land of opportunity for immigrants. Contrary to the American evidence, we find that in terms of life-cycles second and third generation immigrants do converge towards the Danish natives, but generally, migrants’ penalty is large and persistent over time. The only exception is represented by second- generation migrants from high-income countries, who already do substantially better than Danes in prime age.