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Why are the Relative Wages of Immigrants Declining? A Distributional Approach

  • Boudarbat, Brahim
  • Lemieux, Thomas

In this paper, we show that the decline in the relative wages of immigrants in Canada is far from homogenous over different points of the wage distribution. The well-documented decline in the immigrant-Canadian born mean wage gap hides a much larger decline at the low end of the wage distribution, while the gap hardly changed at the top end of the distribution. Using standard OLS regressions and new unconditional quantile regressions, we show that both the changes in the mean wage gap and in the gap at different quantiles are well explained by standard factors such as experience, education, and country of origin of immigrants. Interestingly, the most important source of change in the wages of immigrants relative to the Canadian born is the aging of the baby boom generation that has resulted in a relative increase in the labour market experience, and thus, in the wages, of Canadian born workers relative to immigrants.

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File URL: http://www.clsrn.econ.ubc.ca/workingpapers/CLSRN%20Working%20Paper%20no.%2065%20-%20Boudarbat%20and%20Lemieux.pdf
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Paper provided by Vancouver School of Economics in its series CLSSRN working papers with number clsrn_admin-2010-27.

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Length: 42 pages
Date of creation: 23 Sep 2010
Date of revision: 23 Sep 2010
Handle: RePEc:ubc:clssrn:clsrn_admin-2010-27
Contact details of provider: Web page: http://www.clsrn.econ.ubc.ca/

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  1. David Gray & Jeffrey Mills & Sourushe Zandvakili, 2003. "Immigration, Assimilation and Inequality of Income Distribution in Canada," University of Cincinnati, Economics Working Papers Series 2003-01, University of Cincinnati, Department of Economics.
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