A large number of studies from many western countries have shown that non-western minorities face considerable challenges in the labour market.

This thesis examines if this applies to persons who have received their education in Norway. The data used in this thesis have been created through a combination of information from several public registers from Statistics Norway. The data contain the entire population of graduates from Norwegian universities in the period from 1992 to 2002, all persons who commenced upper secondary education in Norway between 1994 and 2001 and all students who completed a vocational education in the time period from 1997 to 2001.

The findings indicate that the time from school completion to first regular employment for master’s graduates is longer for immigrants compared to the majority. This disadvantage applies particularly to people originating from Africa, who also earn significantly less in their first job than the majority. However, no wage disadvantage is found among other immigrant groups.

Looking at how the disadvantage among master’s graduates develops over the individual’s career, the results show that immigrants’ earnings and employment rates are considerably lower than for the majority, but the differences decline with time since arrival in Norway.

Keeping the time since arrival effect constant, there is a clear tendency for the differences in earnings between male immigrants and natives to increase with time since graduation. With regard to employment, however, the evidence of an increasing gap is limited to women, due to a strong decline in immigrant women’s employment probabilities.

This thesis also examines the impact of ethnic background on employment and earnings among people with a vocational education in Norway. It is shown that the majority has significantly higher earnings than immigrants and the second-generation; however the earnings gap is closing with time since graduation. The results also show that the ethnic differences in earnings are minor when we compare individuals who are fully employed.

Results for employment show that immigrants have a lower probability for full employment compared to the majority, whereas the second-generation experiences only a minor disadvantage. Moreover, the ethnic differences in labour market outcomes after dropping out of upper secondary education are relatively small, and the variation among groups with different countries of origin is limited.

Being non-employed or partly employed seem to be the most common outcomes after dropping out for all ethnic groups. Even with a very meticulous control for human capital (type of education, grades and labour market experience), the overall finding in this thesis is that ethnic minorities experience a clear disadvantage with regards to both employment and earnings.