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 UBC Department of Economics in its series CLSRN Working Papers with number clsrn_admin-2010-27.
Length: 42 pages
Date of creation: 23 Sep 2010
Date of revision: 23 Sep 2010
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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, and Vacancies - - - 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)
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- 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.
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