Wage policies and the integration of immigrants

Most Nordic countries struggle to integrate low-skilled immigrants. High wage floors increase the risk of adverse employment effects for this group, as employers may not find it profitable to hire them. Reductions to the minimum wage could improve labour market prospects for low-skilled immigrants, but in order to have discernible effects, such cuts would need to be significant in scale. Targeted reductions in the minimum wage for new, previously non-existing jobs, along with increased differentiation of minimum wages, may provide an appropriate balance between the conflicting goals of high employment and low wage inequality. The policy brief is produced by Nordregio on behalf of the Nordic Welfare Centre and the project Nordic collaboration for integration. More information at www.integrationnorden.org