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Firm Productivity and Immigrant-Native Earnings Disparity

Author

Listed:
  • Aslund, Olof

    (Uppsala University)

  • Bratu, Cristina

    (Aalto University)

  • Lombardi, Stefano

    (VATT, Helsinki)

  • Thoresson, Anna

    (IFAU)

Abstract

We study the role of firm productivity in explaining earnings disparities between immigrants and natives using population-wide matched employer-employee data from Sweden. We find substantial earnings returns to working in firms with higher persistent productivity, with greater gains for immigrants from non-Western countries. Moreover, the pass-through of within-firm productivity variation to earnings is stronger for immigrants in low-productive, immigrant-dense firms. But immigrant workers are underrepresented in high-productive firms and less likely to move up the productivity distribution. Thus, sorting into less productive firms decreases earnings in poor-performing immigrant groups that would gain the most from working in high-productive firms.

Suggested Citation

  • Aslund, Olof & Bratu, Cristina & Lombardi, Stefano & Thoresson, Anna, 2021. "Firm Productivity and Immigrant-Native Earnings Disparity," IZA Discussion Papers 14960, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp14960
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    Cited by:

    1. Mária Balgová & Hannah Illing, 2023. "Job Displacement and Migrant Labor Market Assimilation," CRC TR 224 Discussion Paper Series crctr224_2023_457, University of Bonn and University of Mannheim, Germany.
    2. Richard Fabling & David C Maré & Philip Stevens, 2022. "Migration and firm-level productivity," Working Papers 2022/01, New Zealand Productivity Commission.
    3. Balgova, Maria & Illing, Hannah, 2023. "Job Displacement and Migrant Labor Market Assimilation," IZA Discussion Papers 16349, Institute of Labor Economics (IZA).
    4. Maria Balgova & Hannah Illing, 2023. "Job Displacement and Migrant Labor Market Assimilation," ECONtribute Discussion Papers Series 246, University of Bonn and University of Cologne, Germany.

    More about this item

    Keywords

    firm productivity; immigrant-native earnings gaps; wage inequality;
    All these keywords.

    JEL classification:

    • 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
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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