Human capital

According to the human capital theory, originally developed by Becker (1964) and Mincer (1958), selection on the labour market is based on the skills that the individual has acquired. By  investing in training and education, or acquiring professional experience, individuals gain additional skills and hence greater human capital, which increases their productivity. The more productive the person, the more the employer will wish to recruit him / her or pay him / her higher wages. Moreover, knowledge of how the labour market operates is also crucial. For example, the job application process varies considerably between countries. Generally, the greater the structural and cultural differences, the harder it is for immigrants to adapt to their new society and secure a good position on the labour market (Vandermeerschen et al. 2017)

Apart from the education level (discussed in section 1.1.1) and the issue of diploma recognition (discussed in section 2.3), language learning is an integral part of that human capital and is therefore necessary in order to improve the chances of entering the labour market. A growing literature suggests that immigrants’ proficiency in the host country language is key to their social and economic integration (Bleackley and Chin 2004, 2010, Chiswick 1991, Chiswick and Miller  2014). The HCE, in its  2018 report, highlighted that language is one of the main obstacles to employment mentioned by immigrants. Moreover, the fact that three national languages co‑exist in Belgium does not help, knowledge of both French and Dutch often being a prerequisite for a job.

The OECD, in partnership with the German association of chambers of commerce and industry (DIHK – Deutscher Industrie‑ und Handelskammertag) and the Ministry of Social Affairs and Labour, conducted a survey among German employers in 2017 to ascertain the obstacles to the recruitment of people of foreign origin, and more particularly asylum‑seekers and refugees. The survey results show that a good to very good command of German is a prerequisite for recruitment, even for low‑skilled jobs, since 50 % of firms require at least a good knowledge of the language. That rises to 90 % for medium‑skilled jobs. Moreover, among the difficulties encountered in taking on refugees, knowledge of the language is the primary problem, followed by the lack of skills, different working practices, and finally uncertainty about the length of stay in Germany. As regards the factors which may facilitate the integration of asylum‑seekers on the labour market, more than three‑quarters of employers consider language training to be very important.

Using a linked database from the CBSS and the LFS for Belgium, Piton and Rycx (2020) analyse the role of language knowledge. Their statistics show that around 40 % of immigrants born outside the EU have no more than intermediate skills in one of Belgium’s three official languages and around 20 % have at most beginner skills. This low level of knowledge of the country’s language is particularly true for immigrants originating from the Near and Middle East, EU candidate countries, other European countries, and Asian countries. This is less a concern among immigrants born in the EU, since fewer than 10 % have no more than beginner skills, two‑third have intermediate skills, and for more than 20 % the host country language corresponds to their mother tongue.

The paper also show that immigrants’ host language proficiency improves with years of residence, even though the results vary considerably among groups of country of birth. Controlling for other personal characteristics, the authors show that immigrants who are more literate in the host country language are significantly more likely to have a job. For EU‑born immigrants, the employment penalty (compared to natives) decreases slightly from –23 pp for beginners to –21 pp for those with at least intermediate skills. The gains are much larger for non‑EU immigrants since the penalty drops from –39 pp to –20 pp.

Given the significant impact of language knowledge, it is interesting to see to what extent Belgian programmes of language classes are efficient. De  Cuyper and Vandermeerschen (2017) evaluate the impact of language courses provided for newcomers in Flanders between 2007 and 2009 in terms of their employment rate 2 years after completion. Their findings do not confirm that language training always has a positive impact on labour market integration. The relationship does not seem to be linear, and other factors enter the equation. While some positive results show up, it is not always the case that a higher level of language knowledge is associated with a higher employment rate.

Social capital is another aspect which is hard to transfer to the host country. A social network can play a crucial role in facilitating entry to the labour market. However, those networks are not always beneficial to immigrants especially if they provide only limited, lower‑paid job opportunities or if they induce immigrants to stay in their network and not look at other potential jobs (Drinkwater 2017). In general, the positive or negative impact of social capital depends on the way in which contacts are themselves integrated into the labour market, and also on the type of job available to them (Kalter and Kogan 2014). Increasing contact with natives, through mentoring for example, could help in that respect. Some mentoring projects already exist in Belgium. Connect2work ¹ is a mentoring project in Flanders for highly skilled people speaking a foreign language which started in  2014.

Duo for a job ² is another example of a mentoring programme which started in Brussels in 2013 and which is now spreading throughout Belgium. The programme targets young immigrants (18 to 30 years old) who are matched with senior mentors (over the age of 50).

Studying that type of mentoring projects in Flanders, De Cuyper and Vandermeeschen (2020) highlighted the crucial role of the supervisory organisation in ensuring a positive outcome. It is not only about initiating meetings between natives and immigrants, it is also about maintaining the quality of the programme, providing guidelines and support to the mentor and the mentee, etc. Moreover, their study shows that the success of the programme also depends on sector‑specific matches. Building a network in the sector corresponding to the immigrants’ skills is key to improve their integration.

Fostering intercultural contacts among the population is also a way to improve the establish positive network effect for immigrants. Based on the socio‑cultural changes survey (SCV‑Survey, Sociaal‑cultureel verschuivingen survey), the Vlaamse migratie‑ en integratiemonitior (2018) studies intercultural contacts in Flanders. Three‑

quarters of Flemish people aged between 18 and 85 years, had personal contacts (at least once during the year) with a person of another origin or culture in 2017, and this figure has increased by 10 pp compared to 2014 (first year of the survey). For weekly contact, the figure drops to 55 %. Men more often declare having personal contact with a person of another origin or culture. Moreover, the proportion of people having intercultural contacts declines with age : from 80 % for the youngest group to only 40 % for the oldest. It also increases with the level of education and the degree of urbanisation of the place of residence. Note, however, that the upward trend between 2014 and 2017 is true for all types of individuals (see table 1).

The study also analyses immigrants’ social contacts, distinguishing between EU and non‑EU origin. Results show that immigrants, especially non‑EU immigrants, have on average fewer social contacts, and are on average less

1 http://www.connect2work.be 2 www.duoforajob.be/en/home/

Table 1

Quality of social contacts, by origin

(in % of people who agree with the statement, Flemish Community, 2015‑2017)

BE EU non‑EU

There are people I can talk to 96 95 91

I feel isolated from other people 6 7 13

There are people I can rely on 96 93 88

There are people who really understand me 93 92 85

I am part of a group of friends 77 75 69

My social contacts are superficial 20 22 31

Source : Vlaamse migratie en integratiemonitor (2018) based on the SCV‑survey 2015‑2017.

satisfied by those contacts. Compared to the previous edition, for 2012‑2014, the situation has improved slightly for EU immigrants, but has worsened for people of non‑EU origin.

Immigrants’ lack of human and cultural capital specific to Belgium may gradually improve with the number of years of residence, for example if they learn the language(s) and how the labour market operates, follow training or gain local work experience. Altogether, this could help them to increase their chance of integration on the labour market. This is also apparent from our regression analysis (see results in annex II.2). The employment and participation probabilities increase with the number of years of residence but at a decreasing rate (see chart 21).

Analysing more precisely the number of years of residence for immigrants in Belgium, Piton and Rycx (2020) found similar results : the employment penalty is, ceteris paribus, largest for those who have been living in Belgium for at most one year. For people born in the EU, this penalty reaches –36 pp compared to –44 pp for those born outside the EU. The situation is less detrimental for people who have been resident for longer, but the effect remains significant after ten years of residence (–20 pp) and even after 35 years (–8 pp to –10 pp).

So, improvement remains low on average. Moreover, results vary among different origin groups. After 10 years of residence, the penalty drops from –26  pp to –3  pp for people born in other Asian countries and is more than halved for those from Sub‑Saharan Africa (from –24 pp to –10 pp). In contrast, the penalty remains quite persistent for people born in the Maghreb and in EU candidate countries, amounting to 21 pp after 10 years and 17 pp to 20 pp after 35 years. The employment gap for people born in other European countries and in the Near and Middle East also remains substantial after more than a decade of residence in Belgium (–19 pp and –28 pp respectively).

Chart 21

Variation on employment and participation probabilities by years of residence for first-generation immigrants

(in %, people aged between 20 and 64 years, annual data from 2009 to 2016, based on a Probit model with time fixed effects controlling for education, Region of residence, age, type of household, group of country of birth, channel of migration and nationality acquisition)

0 1 2 3 4 5 6 7 8 9 10

0 5 10 15 20 25 30 35

Employment Participation

Source : CBSS Datawarehouse, NBB calculations.