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Qualifications, discrimination, or assimilation? An extended framework for analysing immigrant wage gaps

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  • Helena Skyt Nielsen

    ()

  • Michael Rosholm

    ()

  • Nina Smith

    ()

  • Leif Husted

    ()

Abstract

In this paper, we analyze immigrant wage gaps and propose an extension of the traditional wage decomposition technique, which is a synthesis from two strains of literature on ethnic/immigrant wage differences, namely the ‘assimilation literature’ and the ‘discrimination literature’. We estimate separate wage equations for natives and a number of immigrant groups using panel data sample selection models. Based on the estimations, we find that the immigrant wage gap is caused by a lack of qualifications and incomplete assimilation, and that a large fraction of that gap would disappear if only immigrants could find employment and thus accumulate work experience. Copyright Springer-Verlag 2004

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Bibliographic Info

Article provided by Springer in its journal Empirical Economics.

Volume (Year): 29 (2004)
Issue (Month): 4 (December)
Pages: 855-883

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Handle: RePEc:spr:empeco:v:29:y:2004:i:4:p:855-883

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Related research

Keywords: Wage assimilation; immigrants; wage gap; panel data sample selection model; J15; J16; J31; J71;

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  1. Abul Shamsuddin, 1998. "Thedouble-negativeeffect onthe earnings of foreign-born females in Canada," Applied Economics, Taylor & Francis Journals, vol. 30(9), pages 1187-1201.
  2. Oettinger, Gerald S, 1996. "Statistical Discrimination and the Early Career Evolution of the Black-White Wage Gap," Journal of Labor Economics, University of Chicago Press, vol. 14(1), pages 52-78, January.
  3. Charles M. Beach & Christopher Worswick, 1993. "Is There a Double-Negative Effect on the Earnings of Immigrant Women?," Canadian Public Policy, University of Toronto Press, vol. 19(1), pages 36-53, March.
  4. Husted, Leif & Skyt Nielsen, Helena & Rosholm, Michael & Smith, Nina, 2000. "Employment and Wage Assimilation of Male First Generation Immigrants in Denmark," CLS Working Papers 00-1, University of Aarhus, Aarhus School of Business, Centre for Labour Market and Social Research.
  5. Coate, S. & Loury, G.C., 1992. "Will Affirmative Action Policies Eliminate Negative Stereotypes?," Papers 3, Boston University - Department of Economics.
  6. Chiswick, Barry R, 1978. "The Effect of Americanization on the Earnings of Foreign-born Men," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 897-921, October.
  7. Francis Vella, 1998. "Estimating Models with Sample Selection Bias: A Survey," Journal of Human Resources, University of Wisconsin Press, vol. 33(1), pages 127-169.
  8. Altonji, Joseph G. & Blank, Rebecca M., 1999. "Race and gender in the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 48, pages 3143-3259 Elsevier.
  9. George J. Borjas, 1987. "Self-Selection and the Earnings of Immigrants," NBER Working Papers 2248, National Bureau of Economic Research, Inc.
  10. Dustmann, Christian & Rochina-Barrachina, María Engracia, 2000. "Selection Correction in Panel Data Models: An Application to Labour Supply and Wages," IZA Discussion Papers 162, Institute for the Study of Labor (IZA).
  11. Jensen, Peter & Rosholm, Michael & Verner, Mette, 2002. "A Comparison of Different Estimators for Panel Data Sample Selection Models," Working Papers 02-1, University of Aarhus, Aarhus School of Business, Department of Economics.
  12. Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-61, September.
  13. Ekaterini Kyriazidou, 1997. "Estimation of a Panel Data Sample Selection Model," Econometrica, Econometric Society, vol. 65(6), pages 1335-1364, November.
  14. 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.
  15. Long, James E, 1980. "The Effect of Americanization on Earnings: Some Evidence for Women," Journal of Political Economy, University of Chicago Press, vol. 88(3), pages 620-29, June.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Why Indian immigrants earn higher than others in America?
    by Murtaza Haider in eKonometrics on 2012-05-25 19:49:00
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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Cited by:
  1. Blume, Kraen & Verner, Mette, 2007. "Welfare dependency among Danish immigrants," European Journal of Political Economy, Elsevier, vol. 23(2), pages 453-471, June.
  2. Edgard Polanco, 2009. "Asimilación laboral de los inmigrantes colombianos en Estados Unidos," REVISTA DE ECONOMÍA DEL ROSARIO, UNIVERSIDAD DEL ROSARIO.
  3. Martin Kahanec & Anzelika Zaiceva & Klaus F. Zimmermann, 2010. "Ethnic Minorities in the European Union: An Overview," Discussion Papers of DIW Berlin 1090, DIW Berlin, German Institute for Economic Research.
  4. Mahmood, Talat & Schömann, Klaus, 2009. "The decision to migrate: A simultaneous decision making approach," Discussion Papers, Research Unit: Competition and Innovation SP II 2009-17, Social Science Research Center Berlin (WZB).
  5. Florian Lehmer & Johannes Ludsteck, 2011. "The Immigrant Wage Gap in Germany: Are East Europeans Worse Off?," ERSA conference papers ersa10p769, European Regional Science Association.
  6. Chletsos, Michael & Roupakias, Stelios, 2012. "Native-immigrant wage differentials in Greece: discrimination and assimilation," MPRA Paper 39862, University Library of Munich, Germany.
  7. Strom, Steinar & Venturini, Alessandra & Villosio, Claudia, 2013. "Wage Assimilation: Migrants versus Natives and Foreign Migrants versus Internal Migrants," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201341, University of Turin.
  8. Wido Geis, 2010. "High Unemployment in Germany: Why do Foreigners Suffer Most?," Ifo Working Paper Series Ifo Working Paper Nr. 90, Ifo Institute for Economic Research at the University of Munich.
  9. Anees, Muhammad & Sajjad, Muhammad & Ahmed, Ishfaq, 2011. "A counterfactual decomposition analysis of immigrants-natives earnings in Malaysia," Economics Discussion Papers 2011-51, Kiel Institute for the World Economy.
  10. Talat Mahmood & Klaus Schömann, 2003. "On the Migration Decision of IT-Graduates: A Two-Level Nested Logit Model," CIG Working Papers SP II 2003-22, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
  11. Li, Rui & Li, Qinghai & Huang, Shaoan & Zhu, Xi, 2013. "The credit rationing of Chinese rural households and its welfare loss: An investigation based on panel data," China Economic Review, Elsevier, vol. 26(C), pages 17-27.
  12. Larsen, Birthe & Waisman, Gisela, 2007. "Who is hurt by discrimination?," Working Papers 12-2007, Copenhagen Business School, Department of Economics.
  13. D'Addio, Anna Cristina & De Greef, Isabelle & Rosholm, Michael, 2002. "Assessing Unemployment Traps in Belgium Using Panel Data Sample Selection Models," IZA Discussion Papers 669, Institute for the Study of Labor (IZA).
  14. Zimmermann, Klaus F. & Kahanec, Martin & Constant, Amelie F. & DeVoretz, Don J. & Gataullina, Liliya & Zaiceva, Anzelika, 2008. "Report No. 16: Study on the Social and Labour Market Integration of Ethnic Minorities," IZA Research Reports 16, Institute for the Study of Labor (IZA).
  15. Barth, Erling & Bratsberg, Bernt & Raaum, Oddbjørn, 2003. "Local Unemployment and the Earnings Assimilation of Immigrants in Norway," Memorandum 19/2002, Oslo University, Department of Economics.
  16. Talat Mahmood & Klaus Schömann, 2002. "The Determinants of the Migration Decision of IT-graduates from Pakistan: Empirical Evidence for the Design of a German "Green Card"," CIG Working Papers FS IV 02-03a, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
  17. Nielsen, Helena Skyt & Rosholm, Michael & Smith, Nina & Husted, Leif, 2001. "Intergenerational Transmissions and the School-to-Work Transition of 2nd Generation Immigrants," IZA Discussion Papers 296, Institute for the Study of Labor (IZA).

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