The Careers of Immigrants
AbstractI use a unique linked employer employee panel covering all wage earners in the private sector in Portugal to shed new light on the careers of immigrants. During the first ten years in the country immigrants close one third of the initial immigrant-native wage gap. I show that one third of this wage catch-up is accounted for by firm heterogeneity: Immigrants remain in the same occupations but get jobs with better paying _rms. Over time immigrants move to larger, more productive firms and with a higher share of native workers. These patterns are similar for all the recent immigrants irrespective of their origin and in particular of whether their mother tongue is the host country's language. Motivated by these new stylized facts, I suggest an economic assimilation mechanism which highlights imperfect information about immigrant productivity. I build an employer learning model with firm heterogeneity and complementarities between worker and firm type. The initial uncertainty over immigrants' productivity prevents them from getting access to the best jobs. Over time, productivity is revealed and immigrants obtain better firm matches. I derive predictions on the immigrant wage distributions over time, on their mobility patterns and on the productivity distribution of firms they are matched with. The predictions of the model are in line with the data and are not trivially derived from competing explanations.
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Bibliographic InfoPaper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp1171.
Date of creation: Oct 2012
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Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP
Wage differentials; wage convergence; job mobility; immigration; linked employer-employee panel data;
Find related papers by JEL classification:
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers
- J63 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Turnover; Vacancies; Layoffs
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-11-03 (All new papers)
- NEP-LAB-2012-11-03 (Labour Economics)
- NEP-LMA-2012-11-03 (Labor Markets - Supply, Demand, & Wages)
- NEP-MIG-2012-11-03 (Economics of Human Migration)
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