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Immigrant–Native Wage Inequality across Occupational Sectors in Australia

Author

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  • Asad Islam
  • Jaai Parasnis

Abstract

We investigate wage inequality by migrant status across white collar and blue collar occupations in Australia. We use the reweighting and recentered influence function regression methods proposed by Firpo, Fortin, and Lemieux (2009) to decompose wage differentials across its distribution. Migrants are observed to have a wage advantage, and this wage differential varies over the wage distribution as well as by occupation. Significant wage differentials are found above the median: positive for white collar workers and negative for blue collar workers. Overall, the wage advantage of migrants reflects their superior labour market characteristics, and in particular, their levels of education. A decomposition analysis indicates that migrants receive lower returns for their education. We explore the wage differences by country of origin and find that English language proficiency plays an important role.

Suggested Citation

  • Asad Islam & Jaai Parasnis, 2014. "Immigrant–Native Wage Inequality across Occupational Sectors in Australia," Monash Economics Working Papers 14-14, Monash University, Department of Economics.
    • Handle: RePEc:mos:moswps:2014-14
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    File URL: http://www.buseco.monash.edu.au/eco/research/papers/2014/1414immigrantislamparasnis.pdf
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    Citations

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    Cited by:

    1. Polyakova, Evgeniya & Smirnykh, Larisa, 2016. "The earning differential between natives and individuals with immigrant background in Russia: The role of ethnicity," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 43, pages 52-72.
    2. Mark Western & Wojtek Tomaszewski, 2016. "Subjective Wellbeing, Objective Wellbeing and Inequality in Australia," PLOS ONE, Public Library of Science, vol. 11(10), pages 1-20, October.

    More about this item

    Keywords

    RIF regressions; wage inequality; occupations; immigration; decomposition; language;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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