Advanced Search
MyIDEAS: Login to save this article or follow this journal

The Immigrant-Native Wage Gap in Germany

Contents:

Author Info

  • Alisher Aldashev

    ()
    (Kazakh-British Technical University, Almaty)

  • Johannes Gernandt

    ()
    (VDMA)

  • Stephan L. Thomsen

    ()
    (ZEW Mannheim)

Abstract

Immigrant-native wage differentials are observed in many countries, so in Germany. However, the available empirical literature for Germany defined the groups in consideration, immigrants and natives, by citizenship. This limits the explanatory power of the estimates since citizenship distinguishes foreigners and German nationals, but assigns naturalised immigrants (including the large group of ethnic Germans) to the latter group. Providing a more adequate definition based on the concept of origin we analyse the immigrant-native wage gap. Based on data from the German Socio-Economic Panel Study,we decompose the wage gap between native Germans, foreigners, and naturalised immigrants, and consider further subgroups in the analysis. In the literature, time of residence has been proven to be a relevant determinant of immigrants’ wages. For the natives, time of residence is perfectly collinear with age, and unequal sets of variables have to be considered.We therefore suggest an extension of the Oaxaca-Blinder decomposition technique. Our results show a substantial gap in earnings for all immigrants’ groups compared to natives. Discarding immigrants who completed education abroad reduces much of the immigrants’ wage gap. Hence, educational attainment in Germany is an important component of economic integration of immigrants, and degrees obtained abroad are valued less.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.wiso-net.de/webcgi?START=A60&DOKV_DB=ZECO&DOKV_NO=JFNS58C5CC339B7042B06C011BC93232EB2C&DOKV_HS=0&PP=1
File Function: Main text
Download Restriction: Access via GENIOS - German Business Information - http://www.genios.de/r_startseite/index.ein

File URL: http://search.ebscohost.com/login.aspx?direct=true&db=ecn&AN=1327037&site=ehost-live
File Function: Main text
Download Restriction: Access via EBSCOhost Econlit - http://www.ebscohost.com/

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Justus-Liebig University Giessen, Department of Statistics and Economics in its journal Journal of Economics and Statistics.

Volume (Year): 232 (2012)
Issue (Month): 5 (September)
Pages: 490-517

as in new window
Handle: RePEc:jns:jbstat:v:232:y:2012:i:5:p:490-517

Contact details of provider:
Postal: Licher Straße 74, 35394 Gießen
Phone: +49 (0)641 99 22 001
Fax: +49 (0)641 99 22 009
Web page: http://wiwi.uni-giessen.de/home/oekonometrie/Jahrbuecher/
More information through EDIRC

Related research

Keywords: Immigration; wage gap; decomposition; educational attainment; Germany; SOEP;

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Pfeiffer, Friedhelm & Gernandt, Johannes, 2007. "Rising Wage Inequality in Germany," ZEW Discussion Papers 06-019 [rev.2], ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  2. Sebastian Gundel & Heiko Peters, . "Assimilation and Cohort Effects for German Immigrants," Working Papers 200123, Institute of Spatial and Housing Economics, Munster Universitary.
  3. Dustmann, Christian & Ludsteck, Johannes & Schönberg, Uta, 2007. "Revisiting the German Wage Structure," IZA Discussion Papers 2685, Institute for the Study of Labor (IZA).
  4. Fortin, Nicole & Lemieux, Thomas & Firpo, Sergio, 2011. "Decomposition Methods in Economics," Handbook of Labor Economics, Elsevier.
  5. Dustmann, Christian & van Soest, Arthur, 1998. "Language and the Earnings of Immigrants," CEPR Discussion Papers 2012, C.E.P.R. Discussion Papers.
  6. George J. Borjas, 1994. "The Economics of Immigration," Journal of Economic Literature, American Economic Association, vol. 32(4), pages 1667-1717, December.
  7. Aldashev, Alisher & Gernandt, Johannes & Thomsen, Stephan L., 2009. "Language usage, participation, employment and earnings: Evidence for foreigners in West Germany with multiple sources of selection," Labour Economics, Elsevier, vol. 16(3), pages 330-341, June.
  8. Constant, Amelie F. & Massey, Douglas S., 2003. "Labor Market Segmentation and the Earnings of German Guestworkers," IZA Discussion Papers 774, Institute for the Study of Labor (IZA).
  9. Ronald L. Oaxaca & Michael R. Ransom, 1999. "Identification in Detailed Wage Decompositions," The Review of Economics and Statistics, MIT Press, vol. 81(1), pages 154-157, February.
  10. Ben Jann, 2008. "The Blinder–Oaxaca decomposition for linear regression models," Stata Journal, StataCorp LP, vol. 8(4), pages 453-479, December.
  11. Günter Lang, 2005. "The difference between wages and wage potentials: Earnings disadvantages of immigrants in Germany," Journal of Economic Inequality, Springer, vol. 3(1), pages 21-42, April.
  12. Kee, Peter, 1995. "Native-Immigrant Wage Differentials in the Netherlands: Discrimination?," Oxford Economic Papers, Oxford University Press, vol. 47(2), pages 302-17, April.
  13. Joseph G. Altonji & Rebecca M. Blank, . "Race and Gender in the Labor Market," IPR working papers 98-18, Institute for Policy Resarch at Northwestern University.
  14. Chiswick, Barry R. & Miller, Paul W., 2007. "The International Transferability of Immigrants’ Human Capital Skills," IZA Discussion Papers 2670, Institute for the Study of Labor (IZA).
  15. Alicia Adsera & Barry Chiswick, 2007. "Are there gender and country of origin differences in immigrant labor market outcomes across European destinations?," Journal of Population Economics, Springer, vol. 20(3), pages 495-526, July.
  16. Heiko Peters, 2008. "Development of Wage Inequality for Natives and Immigrants in Germany: Evidence from Quantile Regression and Decomposition," SOEPpapers on Multidisciplinary Panel Data Research 113, DIW Berlin, The German Socio-Economic Panel (SOEP).
  17. Rachel M. Friedberg, 1996. "You Can't Take It With You? Immigrant Assimilation and the Portability of Human Capital," NBER Working Papers 5837, National Bureau of Economic Research, Inc.
  18. Michael Fertig & Stefanie Schurer, 2007. "Earnings Assimilation of Immigrants in Germany: The Importance of Heterogeneity and Attrition Bias," SOEPpapers on Multidisciplinary Panel Data Research 30, DIW Berlin, The German Socio-Economic Panel (SOEP).
  19. Shoshana Neuman & Ronald Oaxaca, 2004. "Wage Decompositions with Selectivity-Corrected Wage Equations: A Methodological Note," Journal of Economic Inequality, Springer, vol. 2(1), pages 3-10, April.
  20. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
  21. D.H. Blackaby & D.G. Leslie & P.D. Murphy, 2002. "White-ethnic minority earnings and employment differentials in Britain: evidence from the LFS," Oxford Economic Papers, Oxford University Press, vol. 54(2), pages 270-297, April.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Verena Dill, 2013. "Ethnic Concentration and Extreme Right-Wing Voting Behavior in West Germany," Research Papers in Economics 2013-02, University of Trier, Department of Economics.
  2. Verena Dill, 2013. "Ethnic Concentration and Extreme Right-Wing Voting Behavior in West Germany," SOEPpapers on Multidisciplinary Panel Data Research 565, DIW Berlin, The German Socio-Economic Panel (SOEP).
  3. Humpert, Stephan, 2013. "The immigrant-native pay gap in Germany," MPRA Paper 50413, University Library of Munich, Germany.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:jns:jbstat:v:232:y:2012:i:5:p:490-517. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Winker).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.