Do immigrants have better labour market outcomes than South Africans?

Figures & data

Table 1. Country of birth of working age immigrants to South Africa.

	Naturalised	Foreigners
SADC	0.727*** (0.003)	0.814 (0.001)
Rest of Africa	0.059*** (0.001)	0.093 (0.001)
North America	0.004** (0.000)	0.003 (0.000)
Latin America and Caribbean	0.004*** (0.000)	0.002 (0.000)
Asia	0.063*** (0.001)	0.049 (0.001)
United Kingdom and Europe	0.141*** (0.002)	0.038 (0.001)
Oceania	0.003*** (0.000)	0.002 (0.000)
Years since immigration	20.227*** (0.085)	6.664 (0.026)
Sample	29 605	96 732
Population	360 803	1 190 156

Source: Census 2011.

Notes: Standard errors are in parentheses. The estimates are weighted. Significance levels are shown by ***p < 0.01, **p < 0.05 and *p < 0.1, which indicates whether the mean for the given immigrant status category differs from that for foreigners.

Figure 1. Percentage of working age residents in each municipality who are immigrants. Source: Census 2011.

Table 2. Demographic and human capital characteristics, by immigrant status.

	SA	Naturalised	Foreigners
Age	33.880*** (0.008)	39.773*** (0.074)	31.444 (0.031)
Male	0.476*** (0.000)	0.581*** (0.003)	0.644 (0.002)
Female	0.524*** (0.000)	0.419*** (0.003)	0.356 (0.002)
African	0.784*** (0.000)	0.538*** (0.003)	0.835 (0.001)
Coloured	0.096*** (0.000)	0.017*** (0.001)	0.004 (0.000)
Indian	0.027*** (0.000)	0.053*** (0.001)	0.039 (0.001)
White	0.091*** (0.000)	0.353*** (0.003)	0.047 (0.001)
Other	0.002*** (0.000)	0.039*** (0.001)	0.075 (0.001)
No schooling	0.058*** (0.000)	0.077** (0.002)	0.073 (0.001)
Incomplete schooling	0.559*** (0.000)	0.393*** (0.003)	0.581 (0.002)
Matric	0.320*** (0.000)	0.330*** (0.003)	0.256 (0.001)
Diploma	0.041*** (0.000)	0.114*** (0.002)	0.053 (0.001)
Degree	0.022*** (0.000)	0.086*** (0.002)	0.038 (0.001)
Household size	4.745*** (0.002)	3.426*** (0.012)	2.823 (0.006)
Number of children aged less than 6	0.622*** (0.001)	0.371*** (0.004)	0.351 (0.002)
Number of children aged 6–18	1.249*** (0.001)	0.691*** (0.006)	0.336 (0.003)
Sample	2 587 240	29 605	96 732
Population	30 713 172	360 803	1 190 156

Source: Census 2011.

Notes: Standard errors are in parentheses. The estimates are weighted. The sample is restricted to individuals of working age. Significance levels are shown by ***p < 0.01, **p < 0.05 and *p < 0.1, which indicates whether the mean for the given immigrant status category differs from that for foreigners.

Table 3. Labour market characteristics, by immigrant status.

	SA	Naturalised	Foreigners
Labour market participants	0.552*** (0.000)	0.769*** (0.002)	0.785 (0.001)
Amongst labour market participants:
Employed	0.693*** (0.000)	0.868*** (0.002)	0.810 (0.001)
Amongst the employed:
Employment type
Wage employed	0.844*** (0.000)	0.740*** (0.003)	0.770 (0.002)
Self-employed	0.040*** (0.000)	0.072*** (0.002)	0.080 (0.001)
Both wage and self-employed	0.116*** (0.000)	0.188*** (0.003)	0.150 (0.002)
Sector of employment
Formal sector	0.762*** (0.000)	0.736*** (0.003)	0.589 (0.002)
Informal sector	0.124*** (0.000)	0.129*** (0.002)	0.210 (0.002)
Private households	0.114*** (0.000)	0.135*** (0.003)	0.202 (0.002)
Income (Rands per month)	8,569.710*** (20.155)	17,219.045*** (218.744)	5,841.433 (66.455)
Sample	2 587 240	29 605	96 732
Population	30 713 172	360 803	1 190 156

Source: Census 2011.

Notes: Standard errors are in parentheses. The estimates are weighted. Labour market participation is defined according to the strict definition. Significance levels are shown by ***p < 0.01, **p < 0.05 and *p < 0.1, which indicates whether the mean for the given immigrant status category differs from that for foreigners.

Table 4. Probit estimates of labour market participation (marginal effects).

Dependent variable = 1 if participant, 0 otherwise	(1)	(2)	(3)	(4)
Naturalised	0.213*** (0.003)	0.096*** (0.005)	0.089*** (0.006)	0.088*** (0.006)
Foreigners	0.223*** (0.002)	0.127*** (0.003)	0.114*** (0.003)	0.110*** (0.003)
Social networks:
South Africans			0.001*** (0.000)	−0.002*** (0.000)
Naturalised			0.035*** (0.006)	0.027*** (0.006)
Foreigners			0.041*** (0.002)	0.031*** (0.003)
Years since immigration		−0.002*** (0.000)	−0.003*** (0.000)	−0.004*** (0.000)
Years squared		0.000*** (0.000)	0.000*** (0.000)	0.000*** (0.000)
Other controls	No	Yes	Yes	Yes + FE
Sample	2 733 068	2 717 515	2 713 577	2 713 577
Population	32 493 316	32 311 656	32 264 131	32 264 131

Source: Census 2011.

Notes: Standard errors are in parentheses. The estimates are weighted. Labour market participation is defined according to the strict definition. The estimates displayed are marginal effects. Other controls include age, gender, race, marital status, education level, province of residence, and household composition. FE indicates the inclusion of municipal-level fixed effects. Significance levels are shown by ***p < 0.01, **p < 0.05 and *p < 0.1.

Table 5. Probit estimates of employment amongst labour market participants (marginal effects).

Dependent variable = 1 if employed, 0 if unemployed	(1)	(2)	(3)	(4)
Naturalised	0.172*** (0.003)	0.124*** (0.004)	0.108*** (0.005)	0.110*** (0.006)
Foreigners	0.116*** (0.002)	0.137*** (0.002)	0.129*** (0.003)	0.132*** (0.003)
Social networks:
South Africans			0.005*** (0.000)	0.002*** (0.000)
Naturalised			0.051*** (0.007)	0.043*** (0.007)
Foreigners			0.024*** (0.002)	0.009*** (0.002)
Years since immigration		−0.005*** (0.000)	−0.006*** (0.000)	−0.006*** (0.000)
Years squared		0.000** (0.000)	0.000*** (0.000)	0.000*** (0.000)
Other controls	No	Yes	Yes	Yes + FE
Sample	1 521 614	1 512 804	1 510 599	1 510 599
Population	18 312 457	18 205 302	18 178 385	18 178 385

Source: Census 2011.

Notes: Standard errors are in parentheses. The estimates are weighted. Employment is estimated amongst labour market participants (using the strict definition). The estimates displayed are marginal effects. Other controls include age, gender, race, marital status, education level, province of residence, and household composition. FE indicates the inclusion of municipal-level fixed effects. Significance levels are shown by ***p < 0.01, **p < 0.05 and *p < 0.1.

Table 6. Interval regression of the log of monthly income of the employed.

	(1)	(2)	(3)	(4)	(5)
Naturalised	0.722*** (0.020)	−0.086*** (0.027)	−0.141*** (0.030)	−0.014 (0.029)	−0.019 (0.029)
Foreigners	−0.242*** (0.010)	−0.050*** (0.014)	−0.115*** (0.016)	0.019 (0.015)	0.012 (0.015)
Social networks:
South Africans			0.011*** (0.001)	0.007*** (0.001)	0.010*** (0.001)
Naturalised			0.127*** (0.027)	0.039 (0.025)	0.036 (0.025)
Foreigners			0.102*** (0.008)	0.029*** (0.007)	0.014 (0.009)
Years since immigration		0.001 (0.002)	0.000 (0.002)	0.001 (0.002)	0.000 (0.002)
Years squared		0.000 (0.000)	0.000* (0.000)	0.000 (0.000)	0.000* (0.000)
Constant	7.381*** (0.003)	2.003*** (0.040)	1.971*** (0.040)	3.554*** (0.040)	3.747*** (0.040)
Other controls	No	Yes	Yes	Yes + occup	Yes + occup + FE
Sample	1 012 471	1 005 726	1 004 330	915 288	915 288
Population	12 275 809	12 193 635	12 176 431	11 104 829	11 104 829

Source: Census 2011

Notes: Standard errors are in parentheses. The estimates are weighted. Other controls include age, gender, race, marital status, education level, province of residence, and household composition. Occup indicates the inclusion of controls for occupation, industry, sector and employment type. FE indicates the inclusion of municipal-level fixed effects. Significance levels are shown by ***p < 0.01, **p < 0.05 and *p < 0.1.

Table 7. The role of selection into immigrant status for participation and employment

	Participation (strict definition)			Employment (amongst participants)
	(1)	(2)	(3)	(4)	(5)	(6)
	OLS, full sample	OLS, migrants only	IV	OLS, full sample	OLS, migrants only	IV
Naturalised	0.071*** (0.004)	0.019*** (0.004)	−1.472*** (0.183)	0.108*** (0.004)	0.045*** (0.004)	−1.239*** (0.161)
Foreigners	0.092*** (0.002)	0.023*** (0.002)	0.584*** (0.031)	0.135*** (0.002)	0.063*** (0.002)	0.459*** (0.029)
Social networks:
South Africans	−0.001*** (0.000)	0.002*** (0.000)	0.002*** (0.000)	0.002*** (0.000)	0.005*** (0.000)	0.003*** (0.000)
Naturalised	0.019*** (0.004)	0.016*** (0.004)	5.603*** (0.208)	0.034*** (0.004)	0.026*** (0.004)	1.422*** (0.116)
Foreigners	0.024*** (0.002)	0.028*** (0.002)	−0.877*** (0.040)	0.016*** (0.002)	0.009*** (0.002)	−0.288*** (0.028)
Years since immigration	−0.004*** (0.000)	−0.004*** (0.000)	−0.065*** (0.007)	−0.005*** (0.000)	−0.004*** (0.000)	−0.016*** (0.005)
Years squared	0.000*** (0.000)	0.000*** (0.000)	0.002*** (0.000)	0.000*** (0.000)	0.000*** (0.000)	0.001*** (0.000)
Constant	−0.621*** (0.003)	−0.638*** (0.007)	−0.623*** (0.005)	0.040*** (0.005)	0.037*** (0.008)	0.009 (0.007)
Other controls	Yes + FE	Yes + FE	Yes + FE	Yes + FE	Yes + FE	Yes + FE
Sample	2 709 613	649 175	2 709 613	1 507 414	469 146	1 507 414
Population	32 212 793	7 862 118	32 212 793	18 137 136	5 720 224	18 137 136
IV first stage tests:
Under-identification			408.67			131.180
(p-value)			(0.000)			(0.000)
Over-identification			525.597			86.824
(p-value)			(0.000)			(0.000)

Source: Census 2011.

Notes: Standard errors are in parentheses. The estimates are weighted. The ‘migrants only’ sub-sample comprises domestic internal migrants and all immigrants. All models include controls for age, gender, race, marital status, education level, province of residence, and household composition. FE indicates the inclusion of municipal-level fixed effects. Significance levels are shown by ***p < 0.01, **p < 0.05 and *p < 0.1. The IV tests for under-identification report the Kleibergen-Paap rk LM statistic (H₀: equation is under-identified). The IV tests for over-identification of all instruments report the Hansen J statistic (H₀: instruments are valid).

Table 8. The role of selection into immigrant status for log of monthly income of the employed

	(1)	(2)	(3)
Interval regression	No selection controls	Migrants only	IV
Naturalised	−0.019 (0.029)	−0.272*** (0.029)	0.335*** (0.034)
Foreigners	0.012 (0.015)	−0.267*** (0.016)	0.711*** (0.034)
Social networks:
South Africans	0.010*** (0.001)	0.015*** (0.002)	0.014*** (0.001)
Naturalised	0.036 (0.025)	0.031 (0.026)	3.460*** (0.157)
Foreigners	0.014 (0.009)	0.033*** (0.011)	−0.492*** (0.026)
Years since immigration	0.000 (0.002)	0.005*** (0.002)	−0.175*** (0.005)
Years squared	0.000* (0.000)	0.000** (0.000)	0.005*** (0.000)
Constant	3.747*** (0.040)	3.978*** (0.101)	3.378*** (0.032)
Other controls	Yes + occup + FE	Yes + occup + FE	Yes + occup + FE
Sample	915 288	328 581	901 764
Population	11 104 829	4 032 583	10 936 844
IV first stage tests:
Under-identification			15.454
(p-value)			(0.031)
Over-identification			74.577
(p-value)			(0.000)

Source: Census 2011.

Notes: Standard errors are in parentheses. The estimates are weighted. The ‘migrants only’ sub-sample comprises domestic internal migrants and all immigrants. All models include controls for age, gender, race, marital status, education level, province of residence, household composition, occupation, industry, sector and employment type. FE indicates the inclusion of municipal-level fixed effects. The IV specification is estimated with bootstrapped standard errors. Significance levels are shown by ***p < 0.01, **p < 0.05 and *p < 0.1. The IV tests for under-identification report the Kleibergen-Paap rk LM statistic (H₀: equation is under-identified). The IV tests for over-identification of all instruments report the Hansen J statistic (H₀: instruments are valid).

Table

Dependent variable = 1 if participant, 0 otherwise	(1)	(2)	(3)	(4)
Naturalised	0.601*** (0.008)	0.253*** (0.013)	0.235*** (0.015)	0.230*** (0.015)
Foreigners	0.627*** (0.004)	0.339*** (0.007)	0.302*** (0.008)	0.292*** (0.008)
Social networks:
South Africans			0.003*** (0.000)	−0.004*** (0.001)
Naturalised			0.088*** (0.016)	0.069*** (0.016)
Foreigners			0.105*** (0.006)	0.079*** (0.007)
Years since immigration		−0.005*** (0.001)	−0.008*** (0.001)	−0.009*** (0.001)
Years squared		0.000*** (0.000)	0.000*** (0.000)	0.000*** (0.000)
Age		0.201*** (0.000)	0.201*** (0.000)	0.200*** (0.000)
Age squared		−0.003*** (0.000)	−0.003*** (0.000)	−0.003*** (0.000)
Male		0.284*** (0.002)	0.284*** (0.002)	0.285*** (0.002)
Coloured		0.076*** (0.004)	0.067*** (0.004)	−0.003 (0.004)
Indian		−0.048*** (0.005)	−0.045*** (0.005)	−0.172*** (0.005)
White		0.133*** (0.003)	0.131*** (0.004)	0.079*** (0.004)
Other race		0.012 (0.014)	0.024* (0.014)	−0.012 (0.014)
Living together		0.044*** (0.003)	0.045*** (0.003)	0.040*** (0.003)
Never married		−0.132*** (0.002)	−0.131*** (0.002)	−0.124*** (0.002)
Widower/widow		−0.086*** (0.005)	−0.085*** (0.005)	−0.062*** (0.005)
Separated		−0.051*** (0.009)	−0.050*** (0.009)	−0.032*** (0.009)
Living together		0.100*** (0.007)	0.100*** (0.007)	0.091*** (0.007)
Incomplete schooling		0.319*** (0.004)	0.319*** (0.004)	0.257*** (0.004)
Dependent variable = 1 if participant, 0 otherwise
Matric		0.660*** (0.004)	0.661*** (0.004)	0.586*** (0.004)
Diploma		0.976*** (0.006)	0.979*** (0.006)	0.910*** (0.006)
Degree		0.998*** (0.008)	1.002*** (0.008)	0.939*** (0.008)
Eastern Cape		−0.408*** (0.004)	−0.379*** (0.006)	−0.211*** (0.008)
Northern Cape		−0.192*** (0.006)	−0.183*** (0.006)	−0.309*** (0.024)
Free State		−0.171*** (0.005)	−0.165*** (0.005)	−0.172*** (0.007)
Kwazulu-Natal		−0.277*** (0.004)	−0.252*** (0.005)	−0.145*** (0.006)
North West		−0.172*** (0.004)	−0.161*** (0.005)	−0.368*** (0.024)
Gauteng		0.072*** (0.003)	0.074*** (0.004)	0.011** (0.005)
Mpumalanga		−0.109*** (0.004)	−0.097*** (0.005)	−0.488*** (0.009)
Limpopo		−0.321*** (0.004)	−0.302*** (0.005)	−0.290*** (0.011)
Household size		−0.019*** (0.001)	−0.019*** (0.001)	−0.026*** (0.001)
Number of children aged less than 6 in household		0.001 (0.001)	0.001 (0.001)	0.024*** (0.001)
Number of children aged 6–18 in household		−0.067*** (0.001)	−0.067*** (0.001)	−0.040*** (0.001)
Constant	0.131*** (0.001)	−3.487*** (0.009)	−3.501*** (0.010)	−3.358*** (0.010)
Municipal level fixed-effects	No	No	No	Yes
Sample	2 733 068	2 717 515	2 713 577	2 713 577
Population	32 493 316	32 311 656	32 264 131	32 264 131

Source: Census 2011.

Notes: Standard errors are in parentheses. Labour market participation is defined according to the broad definition. The reference categories are: South African-born, female, black African, married, no schooling, Western Cape. Significance levels are shown by ***p < 0.01, **p < 0.05 and *p < 0.1.