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Qualifications, Discrimination, or Assimilation? An Extended Framework for Analysing Immigrant Wage Gaps

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Author Info
Nielsen, Helena Skyt (CIM, CLS and Aarhus School of Business)
Rosholm, Michael () (CIM, CLS, University of Aarhus, and IZA, Bonn)
Smith, Nina (CIM, CLS, Aarhus School of Business, and IZA, Bonn)
Husted, Leif (CIM and Institute of Local Government Studies, Copenhagen)

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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.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 365.

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Length: 41 pages
Date of creation: Sep 2001
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Handle: RePEc:iza:izadps:dp365

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Related research
Keywords: Wage assimilation; immigrants; wage gap; panel data sample selection model;

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Find related papers by JEL classification:
J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities and Races; Non-labor Discrimination
J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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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.:
  1. Coate, Stephen & Loury, Glenn C, 1993. "Will Affirmative-Action Policies Eliminate Negative Stereotypes?," American Economic Review, American Economic Association, vol. 83(5), pages 1220-40, December. [Downloadable!] (restricted)
    Other versions:
  2. 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. [Downloadable!] (restricted)
    Other versions:
  3. Husted, Leif & Nielsen, Helena Skyt & Rosholm, Michael & Smith, Nina, 2000. "Employment and Wage Assimilation of Male First Generation Immigrants in Denmark," IZA Discussion Papers 101, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  4. 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. [Downloadable!] (restricted)
  5. Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-61, September. [Downloadable!] (restricted)
  6. Field-Hendrey, Elizabeth & Balkan, Erol, 1991. "Earnings and Assimilation of Female Immigrants," Applied Economics, Taylor and Francis Journals, vol. 23(10), pages 1665-72, October.
  7. Ekaterini Kyriazidou, 1997. "Estimation of a Panel Data Sample Selection Model," Econometrica, Econometric Society, vol. 65(6), pages 1335-1364, November.
  8. 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. [Downloadable!] (restricted)
  9. Peter Jensen & Michael Rosholm & Mette Verner, . "A Comparison of Different Estimators for Panel Data Sample Selection Models," Economics Working Papers 2002-1, School of Economics and Management, University of Aarhus. [Downloadable!]
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  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). [Downloadable!]
  11. 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. [Downloadable!] (restricted)
    Other versions:
  12. 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. [Downloadable!] (restricted)
  13. Shamsuddin, Abul F M, 1998. "The Double-Negative Effect on the Earnings of Foreign-Born Females in Canada," Applied Economics, Taylor and Francis Journals, vol. 30(9), pages 1187-1201, September. [Downloadable!] (restricted)
  14. Borjas, George J, 1987. "Self-Selection and the Earnings of Immigrants," American Economic Review, American Economic Association, vol. 77(4), pages 531-53, September. [Downloadable!] (restricted)
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  15. 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. [Downloadable!] (restricted)
    Other versions:
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Cited by:
(explanations, 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.)

  1. Waisman, Gisela & Larsen, Birthe, 2008. "Who is Hurt by Discimination?," SULCIS Working Papers 2008:4, Stockholm University Linnaeus Center for Integration Studies - SULCIS. [Downloadable!]
  2. Nielsen, Helena Skyt & Rosholm, Michael & Smith, Nina & Husted, Leif, 2001. "Intergenerational transmissions and the school-to-work transition of 2. generation immigrants," CLS Working Papers 01-4, University of Aarhus, Aarhus School of Business, Centre for Labour Market and Social Research. [Downloadable!]
    Other versions:
  3. 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. [Downloadable!]
  4. 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). [Downloadable!]
  5. 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). [Downloadable!]
    Other versions:
  6. Klaus F. Zimmermann & Martin Kahanec & Amelie Constant & Don DeVoretz & Liliya Gataullina & Anzelika Zaiceva, 2008. "Study on the Social and Labour Market Integration of Ethnic Minorities," IZA Research Reports 16, Institute for the Study of Labor (IZA). [Downloadable!]
  7. 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). [Downloadable!]
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