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The wage gap of immigrants in the Portuguese labour market

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  • Cláudia Duarte
  • Sónia Cabral

Abstract

Using matched employer-employee data, we examine the wage gap upon arrival between immigrant and native workers in the Portuguese labour market in the 2002-2008 period. We use the relation between Gelbach’s and Oaxaca-Blinder’s decompositions to split the unconditional average wage gap as the sum of a composition effect and a wage structure effect. Our results show that most of the wage gap is not due to worst endowments of the immigrants compared to natives but to differences in the returns to those characteristics and to the immigrant status effect. In particular, education and foreign experience of the average immigrant are significantly less valued in the Portuguese labour market than natives’ education and experience. Total immigrants are a heterogeneous group of different nationalities, with immigrants from the EU15 and China starring as the two extreme cases.

Suggested Citation

  • Cláudia Duarte & Sónia Cabral, . "The wage gap of immigrants in the Portuguese labour market," Economic Bulletin and Financial Stability Report Articles and Banco de Portugal Economic Studies, Banco de Portugal, Economics and Research Department.
    • Handle: RePEc:ptu:bdpart:a201217
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    References listed on IDEAS

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    2. Chiswick, Barry R, 1978. "The Effect of Americanization on the Earnings of Foreign-born Men," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 897-921, October.
    3. Alan S. Blinder, 1973. "Wage Discrimination: Reduced Form and Structural Estimates," Journal of Human Resources, University of Wisconsin Press, vol. 8(4), pages 436-455.
    4. Anabela Carneiro & Natércia Fortuna & José Varejão, 2012. "Immigrants at new destinations: how they fare and why," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(3), pages 1165-1185, July.
    5. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
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