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Labor market performance of Latin American and Caribbean immigrants in Spain

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Abstract

This paper analyzes the wage differentials in Spain between local and foreign employees from Latin America and the Caribbean. It also explores the earnings gap between Latin American employees and other groups of foreign workers from both developing and developed countries. The study is based on the Wage Structure Survey 2006, which is the first nationally representative sample of both foreign and Spanish employees. Using the Machado-Mata econometric procedure, earnings differentials across the whole wage distribution are decomposed into a component related to observable characteristics and another associated to different returns to such endowments. First, we find that, in absolute terms, the earnings differential between Latin American and Caribbean immigrants and natives that is not explained by observable characteristics increases across the wage distribution. While the large gap at the top might be mainly explained by problems of transferability of skills among immigrants, the low differential at the bottom is likely to be related to the compressive effect exerted by labor market institutions such as the minimum wage and collective agreements. A quite similar pattern is observed when they are compared with developed countries´ workers. Secondly, there does not seem to be a significant wage gap between Latin American and the rest of foreign employees from developing countries, possibly because immigrants are largely employed in low-skill jobs where Spanish proficiency is not an essential asset.

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Bibliographic Info

Article provided by Universidad del CEMA in its journal Journal of Applied Economics.

Volume (Year): XIII (2010)
Issue (Month): (November)
Pages: 233-261

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Handle: RePEc:cem:jaecon:v:13:y:2010:n:2:p:233-261

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Keywords: immigration; wage differentials; Latin America; Spain; quantile regression;

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Cited by:
  1. Arda Aktas & Gokce Uysal, 2011. "Explaining the Gender Wage Gap in Turkey Using the Wage Structure Survey," Working Papers 005, Bahcesehir University, Betam, revised Mar 2012.
  2. José-Ignacio Antón & Rafael Muñoz de Bustillo & Miguel Carrera, 2012. "Raining stones? Female immigrants in the Spanish labour market," Estudios de Economia, University of Chile, Department of Economics, vol. 39(1 Year 20), pages 53-86, June.

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