Acquiring and retaining work enables immigrants to earn an income and stabilise their economic situation. It also helps them take their place in the community and the new home country: to learn the language and cultural practices, to understand how the municipality and Finnish society work, as well as how to build social relationships and networks.

Labour market outcomes have a direct effect on how much the migrants to Finland and Helsinki pay in taxes and how much social welfare they need. Their integration into the labour market is thus an essential element in the impact of international migration on the public economy, both nationally and locally. (See, for example, VATT working group 2014; Busk et al. 2016).

This article examines the labour market entry of immigrants in Helsinki – in other words, foreign-born people who have moved to Finland – using register-based employment statistics. As applicable, the situation in Helsinki will be compared to the employment situation of immigrants in Espoo and Vantaa. [1]

Immigrants in the labour market

An extensive OECD and European Union report on immigrant integration based on a range of statistics was published in 2015. The report also examined the status of foreign-born people in the labour markets from a variety of perspectives. (OECD/European Union 2015, 79–128.

According to the report, the employment gap between the immigrants and the native-born was not significant. That said, immigrant men were much more likely to be in employment than women, and employment in the EU Member States was lower than in other OECD countries. Foreign-born people often work under short-term contracts and less favourable working conditions than the native population.

The education level of immigrants also had importance. In many countries, immigrants with low qualifications found employment more often than native-born people with a similar level of education. Nevertheless, education obtained in the country of origin seems to facilitate finding employment, albeit that educated immigrants are often forced to settle with low-skilled jobs.

A person’s reasons for migration also affect their chances of finding a job. Labour migrants often have a position waiting for them in the new country. It goes without saying that their situation in the labour market is different from humanitarian migrants. The majority of immigrants arrive for family reasons, and their capabilities and opportunities to gain employment are influenced by many background factors.

Since people move to different countries partially for different reasons, these disparities are mirrored by the employment of immigrants in each respective country. The United States and Canada operate careful selection systems for potential immigrants, whereas Sweden has had a large share of humanitarian migrants in its inflows. The economic situation and development in each host country, along with the labour market structure, is also clearly reflected by the employment or unemployment of immigrants. (See e.g. Samers 2015, Forsander 2013 for an overview on the status of immigrants on the labour market)

A range of studies and analyses of the national situation and developments have been conducted in different countries. For example, it has been observed in Sweden that foreign-born persons are in salaried employment far less often than their Swedish-born peers. The situation is worst for immigrants who have resided in Sweden for a short period of time, but also the long-term residents have lower employment rates than the Swedish-born peers. For people born in Africa and Asia, the employment situation is worse than for those born elsewhere. (Statistiska centralbyrån 2013, 47–62).

Recent years have also seen some efforts to study the participation of immigrants in the Finnish labour market by means of various data sources and research methods. Immigrants’ employment rates have often been found to be lower and unemployment rates higher. In addition, migrants to Finland are more likely than native-born Finns to work in jobs that do not match their education or skills (see, for example, Myrskylä & Pyykkönen 2014, 19–26). Between 2000 and 2011, the average employment rate of foreign language speakers (those registered as speaking a language other than Finnish, Swedish or Sami) was 15–17 percentage points lower than for speakers of domestic languages (ibid., 20)

Nonetheless, there were significant differences within the immigrant population. According to a study conducted for the Ministry of Employment and the Economy by Pellervo Economic Research and Ramboll, the employment situation has been best among Finnish residents of Estonian origin, whereas for those who have migrated from Asia or Africa, and especially for humanitarian reasons, the initial situation is more difficult (Eronen et al. 2014, 35–36). Furthermore, immigrants who arrived during the depression of the early 1990s have fared worse on the labour market than later arrivals (see, for example, VATT working group 2014, 20).

The number of years spent in the host country has had a positive effect on the immigrants’ employment situation, particularly so for women’s employment rates. During the first year in the host country, the employment rate for men has been significantly higher than for women, but when migrants stay longer in Finland, the improvement is greater for women. Age also matters: employment has been found to improve approximately until the age of 37, after which it turns to a steady decline. (Eronen et al. 2014, 37–40; on the status of men and women see also STM 2016).

The integration of immigrants has also been examined in the so-called UTH Survey carried out by Statistics Finland, National Institute for Welfare and Health, and the Finnish Institute for Occupational Health, in which face-to-face interviews were conducted to determine immigrants’ reasons for moving to Finland, education, language skills, labour market position, well-being, health and perceived safety (Nieminen, Sutela & Hannula 2015).

A related sub-study focussing on employment found out that the employment rate of the immigrant population was approximately ten percentage points lower than that of native peers in 2014 (63.7 and 73.7 per cent among 20–64 year-olds) (Larja & Sutela 2014, 72). The difference between immigrants and the native population is largely explained by the fact that women with foreign background remain outside the labour market as stay-at-home mothers or are unable to find employment. (Ibid., 73–74.) [2]

The UTH Survey also provided more detailed information on the educational background of immigrants. Register-based education data is available in Finland only insofar as the qualification following comprehensive school has been completed in Finland or a formal recognition for a qualification acquired abroad has been granted. Although immigrants were found to be more educated than the register data would suggest, the proportion of those with only basic education is much higher than in the native population. In Finland, those with low or no education are generally in a poorer employment situation, and thus the low level of education among immigrants affects their employment situation in an adverse way. (Ibid., 81.)

Immigrants in Helsinki

Against this background, we can move on to examine the employment situation of immigrants in Helsinki. The term immigrant will be used to refer to persons who were born abroad and have a foreign background. According to Statistics Finland’s ‘origin classification’, the term foreign background refers to persons whose both parents or the only known parent were born abroad, as well as those born abroad but with no information on parents available. Persons with Finnish background are those with at least one parent born in Finland.

Thus defined, the number of immigrants stood at 71,198 in 2014. Their number and relative share of the population has increased considerably in the 2000s. In 2000, the number of immigrants was less than 3,000 while their proportion of the population stood at approximately five per cent. In 2014, immigrants constituted approximately 12 per cent of the population. (Statistics Finland)

The most prominent countries of origin [3] were Russia or the former Soviet Union [4](15,364), Estonia (11,152) and Somalia [5] (4,564). The overwhelming majority consisted of people in working age: 84.2 per cent were aged between 20 and 64. Thirty-nine per cent of the immigrants had lived in Finland for five years or less, and fewer than one-third (29 per cent) were over 15 years of age. The numbers of men and women were roughly equal, but the gender structure varies substantially between countries and regions of origin. The average time that people have resided in Finland also varies within immigrant groups. (Table 1.)

Employment of immigrants in Helsinki

The information on the main type of activity of the population is based on data from a variety of registers. The population is divided into the economically active (salaried employees, self-employed and the unemployed) and economically inactive (people between 0 and 14 years of age, students and schoolchildren, pensioners, and persons who are economically inactive for another reason, such as conscripts and stay-at-home mothers). The reference point in time is the last week of the year.

Based on information from the Population Register, there were 62,901 immigrants aged between 15 and 64 in Helsinki in 2014. Slightly less than half (48.6 per cent) were employed and some 17 per cent were unemployed. In the native population of Helsinki, the corresponding percentages were 70.8 and 7.6. Viewed in this way, the employment situation among immigrants was significantly poorer than that of the native-born population, and the difference was most pronounced for those in employment.

Nevertheless, there is a marked difference between immigrants and the native population in terms of economic activity and inactivity. In 2014, there were more pensioners in Helsinki among the native population (5.9 per cent) than immigrants (2.1 per cent), but more than one fifth (22.7 per cent) of foreign-born persons aged between 15 and 64 fell within the group ‘economically inactive for other reasons’. Of Finnish-born residents, less than five per cent were classified in that group.

Some of the economically inactive immigrants are stay-at-home mothers and a small proportion are persons in military or non-military service. In addition to this, the group most probably includes people who no longer live in Finland. The residential population of Helsinki, which encompasses people residing permanently in actual housing units, includes far fewer immigrants than the number recorded in the Population Register. As mentioned above, the statistical definitions may also sometimes fail to identify the main type of activity of many immigrants.

The different employment situations of the native and immigrant populations remain, however, evident also if we limit our analysis to the workforce (Figure 1). In 2014, 83.9 per cent of the native members of the workforce in Helsinki were salaried employees while 6.3 per cent were self-employed. The unemployment rate stood at 9.7 per cent. Among immigrants, 67.1 per cent were salaried employees, 7.4 self-employed and 25.5 per cent were unemployed.

The unemployment rates vary significantly between groups from different countries and regions of origin. The employment situation of people with a Swedish background is roughly equal to that of the native population, and people with a Chinese, Estonian and Indian background also are able to find work with relative ease. Among these three groups, the proportion of unemployed people in the workforce is higher than in the native population, but the difference is not substantial.

By contrast, approximately half or more of the 15–64-year-old Afghan, Somali and Iraqi immigrants in Helsinki were unemployed in the last week of 2014. The situation was worst for those with an Iraqi background, as only slightly more than one-third (39.4 per cent) was either a salaried employee or entrepreneur at the time. It should be noted, however, that in 2014 there were only 1,178 people with an Iraqi background in the workforce in Helsinki.

The time spent in Finland has a favourable effect on a person’s employment situation (Figure 2). Of the 15–64-year-old immigrants who had lived in Finland for more than 15 years, 54.8 per cent were employed in Helsinki in 2014. By contrast, for those who had stayed in Finland for five years or less, the figure stood at 46.1 per cent. The employment situation has improved more for women than men. In fact, the unemployment rate of women who have lived in Finland for over 15 years is lower than for men after a similarly long stay. 

Among the largest groups based on country or region of origin, Somali immigrants, in particular, show signs of positive development. Of the 15–64-year-olds of Somali origin who have spent more than 15 years in Finland, approximately 31 per cent were employed in 2014. For those who had lived in Finland for five years or less, the employment rate stood at 11 per cent. The group that had stayed in Finland longer included fewer students and schoolchildren and people who were economically inactive for other reasons. Of the Somali immigrants who had lived in Finland for no more than five years, over one third (38.3 per cent) were economically inactive for other reasons. This indicates that stay-at-home mothers make the transition from home to employment over time.

Development of immigrant employment

The development of the employment situation has followed the general economic trends in Finland (Figure 3). Between 2003 and 2008, the unemployment rate of foreign-born 15–64-year-olds dropped in Helsinki, but since then the development has been less favourable, especially in recent years. The ups and downs of the economy affect the position of immigrants in the labour market much more than that of the native population. During an upward trend, the employment situation of immigrants improved more than the labour market position of Finnish-born residents. Correspondingly, the unemployment rate of immigrants has increased more in recent years than for the native population.

At the same time, we should bear in mind that these statistical analyses have been made using annual cross-sectional statistical data. International migration affects the size and composition of the immigrant group and thus also its development in the labour market (cf., for example, VATT working group 2014, 19). Recent years have seen particularly strong increase in migration of people with Estonian origin (cf. Vuori 2016). Since many of these immigrants had a job waiting for them in the Helsinki region, their presence has been a factor in the increased employment figures. Even though unemployment among immigrants has remained high, it is good to remember that the number of employed immigrants in the Helsinki labour market in 2014 was three times higher than in 2000.

The immigration of Estonians is likely to explain at least partially why the employment situation of the immigrant residents of Espoo and Vantaa is better than in Helsinki. More people, relatively speaking, have moved from abroad into the other two cities than Helsinki in recent years, and the inflow of Estonians has been particularly strong. [7] From the perspectives of both employment and unemployment, the situation in 2014 was less favourable in Helsinki than in the neighbouring cities (for employment rate, see Figure 4). The employment development for immigrants in Vantaa particularly positive between 2004 and 2008.

Immigrant employment by sector

Immigrants are employed in a wide range of sectors in Helsinki. In 2013, less than one fifth (17.1 per cent) of all immigrants in Helsinki worked in administrative and support service activities, which include general, routine and often short-term support services for business. The next most common sectors were health and social welfare services (12.9 per cent) and accommodation and food services (11.0 per cent). Overall, the sectoral structure of the Helsinki labour market is dominated by service industries; thus, it is understandable that immigrants also find employment in these sectors.

There are, however, significant differences within the immigrant population when looked at by region of origin (Figure 5). What is more, employment in different sectors is strongly gendered. Almost one fourth [7] of the Estonian-born worked in the administrative and support services sector (more than one third of women), while nearly one fifth worked in construction (almost 40 per cent of men). Nearly one third of employed Somali-born immigrants worked in health and social services (almost two thirds of women), whereas one fourth worked in transport and storage (almost 40 per cent of men). Nearly half of those born in Turkey were employed in accommodation and food services, and slightly over one fourth of Indian immigrants worked in the information and communications sector.

The way the Finnish immigrant population is distributed across industries also reflects the considerable differences in labour market integration between the groups. The largest single occupational class among the foreign-born in 2013 was service and sales workers. This was followed by the group ‘elementary occupations’, which involves supportive tasks that are routine in nature or require little training or education. The third group was ‘professionals’, who usually have a high level of education and long work experience. Of the Turkish-born persons who were in employment in 2014, almost one in four were self-employed.

Conclusions

Information on the main activity of immigrants in Helsinki points to significant differences based on country of origin. For some groups, the situation in the labour market is roughly the same as for the native population. Other immigrant groups typically face difficulties finding work, and subsequently unemployment is common.

The reasons for moving to Finland are understandably reflected in a person’s position in working life. Labour migrants often manage to find employment, whereas humanitarian migrants have more difficulties. Those who move for family-related reasons are in different situations in life: some benefit from their spouse's knowledge, skills and contacts in their search for work, while others spend extended periods of time as stay-at-home mothers.  Language proficiency, education and work experience are also of great importance, although reliable statistics on the effects of these factors are not available.

Economic trends also have a clear impact on the likelihood of immigrants to find work. Integration policy measures also have a beneficial effect on their position in the labour market (see VATT working group 2014, 42–49). Nevertheless, it is difficult to find employment if the economy remains stagnant and the number of jobs in Helsinki does not increase. To ensure a swift entry into the labour market for humanitarian migrants, for instance, there should be an increase in the number of jobs that are accessible even without a strong command of Finnish or Swedish or supplementary studies.

For many people who migrate to Finland, the path to the labour market is long and arduous. A possible result of global crises and conflicts is that Finland and Helsinki will receive growing numbers of people who struggle to find work reasonably quickly. Working and earning a livelihood is necessary not only for these individuals but also for Helsinki. In addition to promoting employment, we should also think of ways for new Helsinki residents to engage themselves actively in the Finnish society and the local community, as well as to develop an identity as a Finn and as a resident of Helsinki.

Pasi Saukkonen is a senior researcher at City of Helsinki Urban Facts. He also holds adjunct professorships in the University of Helsinki and the University of Jyväskylä.

[1] The author would like to express his warmest thanks to Niklas Mäki, who provided assistance in the processing of the statistical material.

[2] According to the authors, the difference between the results of register-based studies and interview studies is due to the fact that the employment statistics apply stricter criteria for defining employment, thus excluding many immigrants from the employed population.

[3] Country of origin primarily refers to the biological mother's country of birth. If there is no knowledge of the country of birth of either parent, the country of origin for foreign-born persons is the country where these persons were born.

[4] In this context, the former Soviet Union does not include the Baltic countries.

[5] Somalia is categorised under ‘Rest of Africa’ in the table.

[6] In addition to migration to Finland from abroad, the statistics cover migration within Finland and the Helsinki Metropolitan Area.

[7] This data is shown according to a person's country of birth instead of the country of origin. There are only minor differences compared to the numbers based on the country of origin classification.

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