IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp7240.html
   My bibliography  Save this paper

Does Better Pre-Migration Performance Accelerate Immigrants' Wage Assimilation?

Author

Listed:
  • Hirsch, Boris

    (Leuphana University Lüneburg)

  • Jahn, Elke J.

    (University of Bayreuth)

  • Toomet, Ott

    (University of Tartu)

  • Hochfellner, Daniela

    (Institute for Employment Research (IAB), Nuremberg)

Abstract

This paper analyzes wage assimilation of ethnic German immigrants to Germany. We use unique administrative data that include a standardized measure of immigrants' pre-migration wage based on occupation, industry, tenure, qualification, and the German wage structure. We find that immigrants experience a substantial initial wage disadvantage compared to natives. During their first 15 years in the host country they manage to close a considerable part of this gap, though assimilation is only partial. A 10% higher pre-migration wage translates into a 1.6% higher wage in Germany when also controlling for educational attainment, thus pointing at partial transferability of human capital acquired in the source country to the host country's labor market. We also find that wage assimilation is significantly accelerated for immigrants with a higher pre-migration wage. Our results are in line with strong complementarities between general skills and host country-specific human capital, in particular proficiency in the host country's language.

Suggested Citation

  • Hirsch, Boris & Jahn, Elke J. & Toomet, Ott & Hochfellner, Daniela, 2013. "Does Better Pre-Migration Performance Accelerate Immigrants' Wage Assimilation?," IZA Discussion Papers 7240, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp7240
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp7240.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Erik Hanushek & Stephen Machin & Ludger Woessmann (ed.), 2011. "Handbook of the Economics of Education," Handbook of the Economics of Education, Elsevier, edition 1, volume 4, number 4, June.
    2. Paul W. Miller & Barry R. Chiswick, 2002. "Immigrant earnings: Language skills, linguistic concentrations and the business cycle," Journal of Population Economics, Springer;European Society for Population Economics, vol. 15(1), pages 31-57.
    3. Kuhlenkasper, Torben & Steinhardt, Max Friedrich, 2017. "Who leaves and when? Selective outmigration of immigrants from Germany," Economic Systems, Elsevier, vol. 41(4), pages 610-621.
    4. Leilanie Basilio & Thomas K. Bauer & Anica Kramer, 2017. "Transferability of Human Capital and Immigrant Assimilation: An Analysis for Germany," LABOUR, CEIS, vol. 31(3), pages 245-264, September.
    5. Yoram Weiss & Robert M. Sauer & Menachem Gotlibovski, 2003. "Immigration, Search, and Loss of Skill," Journal of Labor Economics, University of Chicago Press, vol. 21(3), pages 557-592, July.
    6. Schmidt, Christoph M., 1997. "Immigrant performance in Germany: Labor earnings of ethnic German migrants and foreign guest-workers," The Quarterly Review of Economics and Finance, Elsevier, vol. 37(Supplemen), pages 379-397.
    7. George J. Borjas, 2021. "Assimilation, Changes in Cohort Quality, and the Earnings of Immigrants," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 2, pages 3-29, World Scientific Publishing Co. Pte. Ltd..
    8. Per-Anders Edin & Robert J. LaLonde & Olof Aslund, 2000. "Emigration of Immigrants and Measures of Immigrant Assimilation: Evidence from Sweden," Working Papers 0020, Harris School of Public Policy Studies, University of Chicago.
    9. Barth, Erling & Bratsberg, Bernt & Raaum, Oddbjørn, 2012. "Immigrant wage profiles within and between establishments," Labour Economics, Elsevier, vol. 19(4), pages 541-556.
    10. Amelie Constant & Douglas S. Massey, 2003. "Self-selection, earnings, and out-migration: A longitudinal study of immigrants to Germany," Journal of Population Economics, Springer;European Society for Population Economics, vol. 16(4), pages 631-653, November.
    11. Darren Lubotsky, 2007. "Chutes or Ladders? A Longitudinal Analysis of Immigrant Earnings," Journal of Political Economy, University of Chicago Press, vol. 115(5), pages 820-867, October.
    12. Dustmann, Christian & Glitz, Albrecht, 2011. "Migration and Education," Handbook of the Economics of Education, in: Erik Hanushek & Stephen Machin & Ludger Woessmann (ed.), Handbook of the Economics of Education, edition 1, volume 4, chapter 0, pages 327-439, Elsevier.
    13. Wei-Yin Hu, 2000. "Immigrant Earnings Assimilation: Estimates from Longitudinal Data," American Economic Review, American Economic Association, vol. 90(2), pages 368-372, May.
    14. Ana Ferrer & W. Craig Riddell, 2008. "Education, credentials, and immigrant earnings," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 41(1), pages 186-216, February.
    15. Bauer, Thomas & Zimmermann, Klaus F., 1997. "Unemployment and wages of ethnic Germans," The Quarterly Review of Economics and Finance, Elsevier, vol. 37(Supplemen), pages 361-377.
    16. Pendakur, Krishna & Woodcock, Simon, 2010. "Glass Ceilings or Glass Doors? Wage Disparity Within and Between Firms," Journal of Business & Economic Statistics, American Statistical Association, vol. 28(1), pages 181-189.
    17. Robert F. Schoeni, 1997. "New Evidence on the Economic Progress of Foreign-Born Men in the 1970s and 1980s," Journal of Human Resources, University of Wisconsin Press, vol. 32(4), pages 683-740.
    18. Sanromá, Esteban & Ramos, Raul & Simón, Hipólito, 2009. "Immigrant Wages in the Spanish Labour Market: Does the Origin of Human Capital Matter?," IZA Discussion Papers 4157, Institute of Labor Economics (IZA).
    19. Zvi Eckstein & Yoram Weiss, 2004. "On The Wage Growth of Immigrants: Israel, 1990-2000," Journal of the European Economic Association, MIT Press, vol. 2(4), pages 665-695, June.
    20. 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.
    21. Sanromá, Esteban & Ramos, Raul & Simón, Hipólito, 2009. "Immigrant Wages in the Spanish Labour Market: Does the Origin of Human Capital Matter?," IZA Discussion Papers 4157, Institute for the Study of Labor (IZA).
    22. Constant, Amelie F. & Massey, Douglas S., 2003. "Labor Market Segmentation and the Earnings of German Guestworkers," IZA Discussion Papers 774, Institute of Labor Economics (IZA).
    23. Holger Bonin & Bernd Raffelhüschen & Jan Walliser, 2000. "Can Immigration Alleviate the Demographic Burden?," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 57(1), pages 1-21, September.
    24. Erik Hanushek & Stephen Machin & Ludger Woessmann (ed.), 2011. "Handbook of the Economics of Education," Handbook of the Economics of Education, Elsevier, edition 1, volume 3, number 3, June.
    25. Bernt Bratsberg & James F. Ragan Jr., 2002. "The Impact of Host-Country Schooling on Earnings: A Study of Male Immigrants in the United States," Journal of Human Resources, University of Wisconsin Press, vol. 37(1), pages 63-105.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wapler, Rüdiger & Hochfellner, Daniela, 2014. "Do High-Skilled Immigrants find Jobs Faster than Low-Skilled Immigrants?," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100306, Verein für Socialpolitik / German Economic Association.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hirsch, Boris & Jahn, Elke J. & Toomet, Ott & Hochfellner, Daniela, 2014. "Do better pre-migration skills accelerate immigrants' wage assimilation?," Labour Economics, Elsevier, vol. 30(C), pages 212-222.
    2. Dustmann, Christian & Glitz, Albrecht, 2011. "Migration and Education," Handbook of the Economics of Education, in: Erik Hanushek & Stephen Machin & Ludger Woessmann (ed.), Handbook of the Economics of Education, edition 1, volume 4, chapter 0, pages 327-439, Elsevier.
    3. Cláudia Duarte & Sónia Cabral, 2013. "Mind the gap! The relative wages of immigrants in the Portuguese labour market," Working Papers w201305, Banco de Portugal, Economics and Research Department.
    4. Leilanie Basilio & Thomas K. Bauer & Anica Kramer, 2017. "Transferability of Human Capital and Immigrant Assimilation: An Analysis for Germany," LABOUR, CEIS, vol. 31(3), pages 245-264, September.
    5. Christian Dustmann & Joseph-Simon Görlach, 2014. "Selective Outmigration and the Estimation of Immigrants' Earnings Profiles," CESifo Working Paper Series 4617, CESifo.
    6. Strom, Steinar & Venturini, Alessandra & Villosio, Claudia, 2013. "Wage Assimilation: Migrants versus Natives and Foreign Migrants versus Internal Migrants," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201341, University of Turin.
    7. Jahn, Elke & Hirsch, Boris, 2012. "Is there monopsonistic discrimination against immigrants? First evidence from linked employer employee data," VfS Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 65417, Verein für Socialpolitik / German Economic Association.
    8. Glitz, Albrecht, 2014. "Ethnic segregation in Germany," Labour Economics, Elsevier, vol. 29(C), pages 28-40.
    9. Ran Abramitzky & Leah Boustan, 2017. "Immigration in American Economic History," Journal of Economic Literature, American Economic Association, vol. 55(4), pages 1311-1345, December.
    10. Christoph Albert & Albrecht Glitz & Joan Llull, 2021. "Labor Market Competition and the Assimilation of Immigrants," Working Papers 1280, Barcelona School of Economics.
    11. Sanromá, Esteban & Ramos, Raul & Simón, Hipólito, 2009. "Immigrant Wages in the Spanish Labour Market: Does the Origin of Human Capital Matter?," IZA Discussion Papers 4157, Institute of Labor Economics (IZA).
    12. Bonin, Holger, 2017. "The Potential Economic Benefits of Education of Migrants in the EU," IZA Research Reports 75, Institute of Labor Economics (IZA).
    13. Ran Abramitzky & Leah Platt Boustan & Katherine Eriksson, 2014. "A Nation of Immigrants: Assimilation and Economic Outcomes in the Age of Mass Migration," Journal of Political Economy, University of Chicago Press, vol. 122(3), pages 467-506.
    14. Brunow, Stephan & Jost, Oskar, 2019. "Wages of migrant and native employees in Germany: new light on an old issue," IAB-Discussion Paper 201910, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    15. Sari Pekkala Kerr & William R. Kerr, 2011. "Economic Impacts of Immigration: A Survey," Finnish Economic Papers, Finnish Economic Association, vol. 24(1), pages 1-32, Spring.
    16. Sónia Cabral & Cláudia Duarte, 2016. "Lost in translation? The relative wages of immigrants in the Portuguese labour market," International Review of Applied Economics, Taylor & Francis Journals, vol. 30(1), pages 27-47, January.
    17. Mikal Skuterud & Mingcui Su, 2012. "The influence of measurement error and unobserved heterogeneity in estimating immigrant returns to foreign and host-country sources of human capital," Empirical Economics, Springer, vol. 43(3), pages 1109-1141, December.
    18. Núria Rodríguez-Planas, 2012. "Wage and occupational assimilation by skill level: migration policy lessons from Spain," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 1(1), pages 1-20, December.
    19. Gathmann, Christina & Keller, Nicolas, 2014. "Returns to Citizenship? Evidence from Germany's Recent Immigration Reforms," IZA Discussion Papers 8064, Institute of Labor Economics (IZA).
    20. Alcobendas, Miguel Angel & Rodríguez-Planas, Núria & Vegas, Raquel, 2012. "Wage and Occupational Assimilation by Skill Level," IZA Discussion Papers 6543, Institute of Labor Economics (IZA).

    More about this item

    Keywords

    migration; labor market assimilation; transferability of human capital; ethnic Germans;
    All these keywords.

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp7240. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.