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Immigrant Wage Profiles Within and Between Establishments

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  • Erling Barth

    (Institute for Social Research, Oslo)

  • Bernt Bratsberg

    (Ragnar Frisch Centre for Economic Research)

  • Oddbjørn Raaum

    (Ragnar Frisch Centre for Economic Research)

Abstract

Life cycle wages of immigrants from developing countries fall short of catching up with wages of natives. This disparity reflects both lower wages at entry and lower wage growth. Using linked employer-employee data, we show that 40 percent of the native-immigrant wage gap is explained by differential sorting across establishments. Our findings point to differences in job mobility and intermittent spells of unemployment as major sources of the discrepancy in lifetime wages. The inferior wage growth of immigrants primarily results from failure to advance to higher paying establishments over time. This pattern is consistent with statistical discrimination in hiring but not with monopsonistic discrimination due to informational frictions.

Suggested Citation

  • Erling Barth & Bernt Bratsberg & Oddbjørn Raaum, 2011. "Immigrant Wage Profiles Within and Between Establishments," Norface Discussion Paper Series 2011019, Norface Research Programme on Migration, Department of Economics, University College London.
  • Handle: RePEc:nor:wpaper:2011019
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    Cited by:

    1. Bernt Bratsberg & Oddbjørn Raaum & Knut Røed, 2021. "Excess churn in integrated labor markets," Journal of Population Economics, Springer;European Society for Population Economics, vol. 34(3), pages 865-892, July.
    2. Sari Pekkala Kerr & William R. Kerr & William F. Lincoln, 2015. "Skilled Immigration and the Employment Structures of US Firms," Journal of Labor Economics, University of Chicago Press, vol. 33(S1), pages 147-186.
    3. Glitz, Albrecht, 2014. "Ethnic segregation in Germany," Labour Economics, Elsevier, vol. 29(C), pages 28-40.
    4. Christian Dustmann, 2014. "Selective Outmigration and the Estimation of Immigrants Earnings Profiles," CReAM Discussion Paper Series 1402, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
    5. 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.
    6. Bernt Bratsberg & Oddbjørn Raaum & Knut Røed, 2018. "Job Loss and Immigrant Labour Market Performance," Economica, London School of Economics and Political Science, vol. 85(337), pages 124-151, January.
    7. Ansala, Laura & Åslund, Olof & Sarvim¨aki, Matti, 2018. "Immigration history, entry jobs, and the labor market integration of immigrants," Working Paper Series 2018:20, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    8. Albanese, Andrea & Gallo, Giovanni, 2020. "Buy flexible, pay more: The role of temporary contracts on wage inequality," Labour Economics, Elsevier, vol. 64(C).
    9. 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.
    10. Fiaschi, Davide & Tealdi, Cristina, 2020. "Winners and Losers of Immigration," IZA Discussion Papers 13600, Institute of Labor Economics (IZA).
    11. Bernt Bratsberg & Oddbjørn Raaum & Ole Rogeberg, 2017. "Migrant labor in the Norwegian petroleum sector," Development Working Papers 420, Centro Studi Luca d'Agliano, University of Milano.
    12. Steinar Holden & Åsa Rosén, 2014. "Discrimination And Employment Protection," Journal of the European Economic Association, European Economic Association, vol. 12(6), pages 1676-1699, December.
    13. Krishna Pendakur & Ravi Pendakur & Pieter Bevelander, 2016. "Are Residential and Workplace Concentration Correlated for Immigrants? Evidence for Sweden," Journal of International Migration and Integration, Springer, vol. 17(3), pages 687-706, August.
    14. Davide Fiaschi & Cristina Tealdi, 2021. "Winners and losers of immigration," Papers 2107.06544, arXiv.org, revised Aug 2021.
    15. 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).
    16. Åslund, Olof & Forslund, Anders & Liljeberg, Linus, 2017. "Labour market entry of non-Labour migrants – Swedish evidence," Working Paper Series 2017:15, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    17. Bossler, Mario, 2014. "Sorting within and across establishments : the immigrant-native wage differential in Germany," IAB Discussion Paper 201410, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    18. Brenzel, Hanna & Reichelt, Malte, 2015. "Job mobility as a new explanation for the immigrant-native wage gap : a longitudinal analysis for the German labor market," IAB Discussion Paper 201512, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    19. Ana Damas de Matos, 2017. "Firm heterogeneity and immigrant wage assimilation," Applied Economics Letters, Taylor & Francis Journals, vol. 24(9), pages 653-657, May.
    20. Magnus Strömgren & Tiit Tammaru & Alexander Danzer & Maarten Ham & Szymon Marcińczak & Olof Stjernström & Urban Lindgren, 2014. "Factors Shaping Workplace Segregation Between Natives and Immigrants," Demography, Springer;Population Association of America (PAA), vol. 51(2), pages 645-671, April.

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