Why are the Relative Wages of Immigrants Declining? A Distributional Approach
AbstractIn this paper, we show that the decline in the relative wages of immigrants in Canada is far from homogenous over different points of the wage distribution. The well-documented decline in the immigrant-Canadian born mean wage gap hides a much larger decline at the low end of the wage distribution, while the gap hardly changed at the top end of the distribution. Using standard OLS regressions and new unconditional quantile regressions, we show that both the changes in the mean wage gap and in the gap at different quantiles are well explained by standard factors such as experience, education, and country of origin of immigrants. Interestingly, the most important source of change in the wages of immigrants relative to the Canadian born is the aging of the baby boom generation that has resulted in a relative increase in the labour market experience, and thus, in the wages, of Canadian born workers relative to immigrants.
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Bibliographic InfoPaper provided by Vancouver School of Economics in its series CLSSRN working papers with number clsrn_admin-2010-27.
Length: 42 pages
Date of creation: 23 Sep 2010
Date of revision: 23 Sep 2010
Contact details of provider:
Web page: http://www.clsrn.econ.ubc.ca/
Canada; Immigration; Wages distribution; Unconditional quantile regression;
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, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
- C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-10-02 (All new papers)
- NEP-LAB-2010-10-02 (Labour Economics)
- NEP-MIG-2010-10-02 (Economics of Human Migration)
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.:
- David Gray & Jeffrey Mills & Sourushe Zandvakili, 2003. "Immigration, Assimilation and Inequality of Income Distribution in Canada," University of Cincinnati, Economics Working Papers Series 2003-01, University of Cincinnati, Department of Economics.
- Rienzo, Cinzia, 2008. "Residual Wage Inequality and Immigration in the UK and the US," MPRA Paper 30279, University Library of Munich, Germany, revised Mar 2011.
- Abbott, Michael G. & Beach, Charles M., 2013. "Earnings Mobility of Canadian Immigrants: A Transition Matrix Approach," CLSSRN working papers clsrn_admin-2013-47, Vancouver School of Economics, revised 27 Oct 2013.
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