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Mind the gap! The relative wages of immigrants in the Portuguese labour market

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  • Sónia Cabral
  • Cláudia Duarte

Abstract

Using matched employer-employee data, we examine the wage gaps between immigrant and native workers in the Portuguese labour market in the 2002-2008 period. We use the relation between the Gelbach’s and Oaxaca-Blinder’s decompositions to split the unconditional average wage gap as the sum of a composition effect and a wage structure effect. Most of the wage gap is not due to worst endowments of the immigrants but to differences in the returns to those characteristics and to the immigrant status effect. In particular, education and foreign experience of the average immigrants are significantly less valued in the Portuguese labour market. Overall, the wages of immigrants do not fully converge to those of comparable natives as experience in the Portuguese labour market increases. The assimilation rates tend to be stronger in the first years after migration and for immigrants with higher levels of pre-immigration experience. Total immigrants are a heterogeneous group of different nationalities, with immigrants from the EU15 and China starring as the two extreme cases.

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Paper provided by Banco de Portugal, Economics and Research Department in its series Working Papers with number w201305.

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Date of creation: 2013
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Handle: RePEc:ptu:wpaper:w201305

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  1. Carneiro, Anabela & Fortuna, Natércia & Varejão, José, 2010. "Immigrants at New Destinations: How They Fare and Why," IZA Discussion Papers 4892, Institute for the Study of Labor (IZA).
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  3. Kramer, Anica & Basilio, Leilanie & Bauer, Thomas K., 2013. "Transferability of Human Capital and Immigrant Assimilation: An Analysis for Germany," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79964, Verein für Socialpolitik / German Economic Association.
  4. Antecol, Heather & Kuhn, Peter J. & Trejo, Stephen, 2003. "Assimilation via Prices or Quantities? Labor Market Institutions and Immigrant Earnings Growth in Australia, Canada, and the United States," IZA Discussion Papers 802, Institute for the Study of Labor (IZA).
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  6. Borjas, George J, 1985. "Assimilation, Changes in Cohort Quality, and the Earnings of Immigrants," Journal of Labor Economics, University of Chicago Press, vol. 3(4), pages 463-89, October.
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  11. Sónia Cabral & Cláudia Duarte, 2010. "Employment and wages of immigrants in Portugal," Working Papers w201031, Banco de Portugal, Economics and Research Department.
  12. Dell'Aringa, Carlo & Lucifora, Claudio & Pagani, Laura, 2012. "A "Glass-Ceiling" Effect for Immigrants in the Italian Labour Market?," IZA Discussion Papers 6555, Institute for the Study of Labor (IZA).
  13. Nicole Fortin & Thomas Lemieux & Sergio Firpo, 2010. "Decomposition Methods in Economics," NBER Working Papers 16045, National Bureau of Economic Research, Inc.
  14. Mark C. Regets & Harriet Orcutt Duleep, 1999. "Immigrants and Human-Capital Investment," American Economic Review, American Economic Association, vol. 89(2), pages 186-191, May.
  15. Heather Antecol & Peter Kuhn & Stephen Trejo, 2006. "Assimilation via Prices or Quantities? Sources of Immigrant Earnings Growth in Australia, Canada and the United States," CReAM Discussion Paper Series 0603, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  16. Joseph Schaafsma & Arthur Sweetman, 2001. "Immigrant earnings: age at immigration matters," Canadian Journal of Economics, Canadian Economics Association, vol. 34(4), pages 1066-1099, November.
  17. Alessandra Venturini & Claudia Villosio, 2008. "Labour-market assimilation of foreign workers in Italy," Oxford Review of Economic Policy, Oxford University Press, vol. 24(3), pages 518-542, Autumn.
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