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Are we there yet? Intergenerational mobility and economic assimilation of second-generation immigrants in Estonia

Author

Listed:
  • Laura Helena Kivi

    (Estonian Center for Applied Research (CentAR), Tallinn, Estonia)

  • Janno Järve

    (Estonian Center for Applied Research (CentAR), Tallinn, Estonia)

  • Sten Anspal

    (Estonian Center for Applied Research (CentAR), Tallinn, Estonia)

  • Marko Sõmer

    (Estonian Center for Applied Research (CentAR), Tallinn, Estonia)

  • Indrek Seppo

    (Estonian Center for Applied Research (CentAR), Tallinn, Estonia)

Abstract

This study investigates the role of intergenerational mobility in explaining the native-immigrant income gap in Estonia. A rich registry dataset on yearly earnings and different background characteristics for the period of 2007–2017 is used. We find that an increase of 1 percentile in parent income rank is associated with on average 0.2 percentile increase in child income rank for both natives and second-generation immigrants. Results from a detailed Blinder-Oaxaca decomposition indicate that up to 21% of the gap between income ranks of second-generation immigrants and natives is related to differences in parental background. Once we control for education, family, residence and industry related choices, differences in the parental income rank account for around 8% of the overall gap. The results indicate that although the intergenerational income mobility is relatively high in Estonia both for natives and children of foreign-born, the native-immigrant earnings gap has not decreased for the second generation.

Suggested Citation

  • Laura Helena Kivi & Janno Järve & Sten Anspal & Marko Sõmer & Indrek Seppo, 2021. "Are we there yet? Intergenerational mobility and economic assimilation of second-generation immigrants in Estonia," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 21(2), pages 158-183.
    • Handle: RePEc:bic:journl:v:21:y:2021:i:2:p:158-183
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    More about this item

    Keywords

    Intergenerational mobility; immigrants; income gap; decomposition;
    All these keywords.

    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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