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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. 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.
    2. Glitz, Albrecht, 2014. "Ethnic segregation in Germany," Labour Economics, Elsevier, vol. 29(C), pages 28-40.
    3. 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.
    4. Jahn, Elke & Hirsch, Boris, 2012. "Is there monopsonistic discrimination against immigrants? First evidence from linked employer employee data," Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 65417, Verein für Socialpolitik / German Economic Association.
    5. 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.
    6. 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, revised 23 Feb 2017.
    7. 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.
    8. Hirsch, Boris & Jahn, Elke J. & Toomet, Ott & Hochfellner, Daniela, 2013. "Does Better Pre-Migration Performance Accelerate Immigrants' Wage Assimilation?," IZA Discussion Papers 7240, Institute for the Study of Labor (IZA).
    9. 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].
    10. 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].
    11. 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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