The Great Recession and the labour market in Italy: the case of Albanian Immigrants

The aim of this paper is to identify the labour market impact of the Great Recession on Albanian immigrants compared to natives in Italy, investigating how this relationship has evolved since the beginning of the downturn. The empirical analysis is based on microdata from the Italian Labour Force Survey (ILFS) for the 2007-2015 period. Results from descriptive statistics and probit estimates show that Albanian immigrants have been hardly penalized by the recession in terms of relative employment probability, mainly between 2012 and 2014. Furthermore, the employment gap with the natives has been widening during the downturn. However, estimates based on pseudo panel data show that the deteriorating labour market performance of the Albanians registered during the crisis is explained by the fact that Albanian immigrants are more concentrated in socio-demographic groups that were more severely hit by the crisis, such as males, the young and the low educated. Once we control for observed characteristics and unobserved heterogeneity, we do not find significant changes in the employment differential between the two groups during the downturn.