Human Capital Quality and the Immigrant Wage Gap
AbstractWe propose a new methodology for analyzing determinants of the wage gap between immigrants and natives. A Mincerian regression framework is extended to include GDP per capita in an immigrant’s country of birth as a proxy for the quality of education and work experience acquired in that country. In this regard, a central finding is that Canadian immigrants’ returns to schooling and work experience significantly increase with the GDP per capita of their country of birth. The contribution of quality of schooling and work experience to the immigrant wage gap is also examined. It is shown that lower human capital quality completely negates the endowment advantage that immigrants have in the areas of schooling and work experience, so that this factor is key to understanding why they earn less than Canadian natives. Since data on GDP per capita are available for most countries in the world over long periods of time, the proposed methodology can be applied to analyze immigrant wage gaps for a large set of countries for which common statistics on natives and immigrants are available.
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Bibliographic InfoPaper provided by University of Ottawa, Department of Economics in its series Working Papers with number 1212E.
Length: 33 pages
Date of creation: 2012
Date of revision:
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More information through EDIRC
Wage differentials; immigrants vs. Canadian natives; human capital quality; immigration policies; work experience; education;
Find related papers by JEL classification:
- J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
- J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-10-06 (All new papers)
- NEP-HRM-2012-10-06 (Human Capital & Human Resource Management)
- NEP-LMA-2012-10-06 (Labor Markets - Supply, Demand, & Wages)
- NEP-MIG-2012-10-06 (Economics of Human Migration)
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