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Immigrant Wage Profiles Within and Between Establishments

  • Erling Barth

    ()

    (Institute for Social Research, Oslo)

  • Bernt Bratsberg

    ()

    (Ragnar Frisch Centre for Economic Research)

  • Oddbjørn Raaum

    ()

    (Ragnar Frisch Centre for Economic Research)

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.

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Paper provided by Norface Research Programme on Migration, Department of Economics, University College London in its series Norface Discussion Paper Series with number 2011019.

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Date of creation: Oct 2011
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Handle: RePEc:nor:wpaper:2011019
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