Migrants’ integration processes and their labour market inclusion occur within distinct local contexts. However, the existing literature has paid little attention to the role of the local context and its relationship with national-level policy outcomes on migrant integration. This study addresses this gap by using new regional (NUTS-2) data from Eurostat and integration policy data from MIPEX, coupled with multivariate analyses, to investigate how national-level integration policies are related to the employment rate gap between migrants and country nationals, and how this relationship varies depending on the local context.

The results of this study show that migrant integration policies exhibit no association with this gap in low-competitive, culturally homogeneous and rural regions. Conversely, integration policies are associated with a larger gap in high-competitive and diverse urban regions. Notably, consistent with previous national-level literature, inclusive integration policies are associated with negative outcomes for migrants compared to country nationals. A shift towards more inclusive policies is found to reduce this gap, suggesting that inclusive policies may be a response to a widening divide between country nationals and migrants. The study's key findings include:

• a shift toward more inclusive policies reduces the employment gap
• national-level policies are associated with the labour market situation of migrants only in high-competitive and diverse urban regions