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Understanding the Native–Immigrant Wage Gap Using Matched Employer-Employee Data

Author

Listed:
  • Cristian Bartolucci

    (Cristian Bartolucci is affiliated with Collegio Carlo Alberto.)

Abstract

In this article, the author proposes a new method for measuring wage discrimination that builds on the methodology first developed by Hellerstein and Neumark (1999). The author’s method has three main advantages: It is robust to labor market segregation, it does not impose linearity on the wage-setting equation, and it is not only a test for discrimination but also produces a measure of discrimination. Using matched employer-employee data from Germany, the author finds that immigrants are being discriminated against. They receive wages that are 13% lower than native workers in the same firm.

Suggested Citation

  • Cristian Bartolucci, 2014. "Understanding the Native–Immigrant Wage Gap Using Matched Employer-Employee Data," ILR Review, Cornell University, ILR School, vol. 67(4), pages 1166-1202, October.
    • Handle: RePEc:sae:ilrrev:v:67:y:2014:i:4:p:1166-1202
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    Citations

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    Cited by:

    1. Kai Ingwersen & Stephan L. Thomsen, 2021. "The immigrant-native wage gap in Germany revisited," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 19(4), pages 825-854, December.
    2. Valentine Fays & Benoît Mahy & François Rycx & Mélanie Volral, 2021. "Wage discrimination based on the country of birth: do tenure and product market competition matter?," Applied Economics, Taylor & Francis Journals, vol. 53(13), pages 1551-1571, March.
    3. Christl, Michael & Köppl-Turyna, Monika & Gnan, Phillipp, 2017. "Wage Differences Between Immigrants and Natives in Austria: The Role of Literacy Skills," GLO Discussion Paper Series 145, Global Labor Organization (GLO).
    4. David Neumark, 2018. "Experimental Research on Labor Market Discrimination," Journal of Economic Literature, American Economic Association, vol. 56(3), pages 799-866, September.
    5. Andrej Cupák & Pavel Ciaian & d'Artis Kancs, 2021. "Comparing the immigrant-native pay gap: A novel evidence from home and host countries," EERI Research Paper Series EERI RP 2021/05, Economics and Econometrics Research Institute (EERI), Brussels.
    6. Maria A. Cattaneo, 2022. "What wages do people expect for vocational and academic education backgrounds in Switzerland?," Economics of Education Working Paper Series 0197, University of Zurich, Department of Business Administration (IBW).
    7. Elena Grinza & Stephan Kampelmann & François Rycx, 2020. "L’union fait la force? Evidence for wage discrimination in firms with high diversity," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 18(2), pages 181-211, June.
    8. Ikhenaode, Bright Isaac, 2024. "Immigration, skill acquisition, and fiscal redistribution in a search equilibrium model," Macroeconomic Dynamics, Cambridge University Press, vol. 28(1), pages 1-31, January.
    9. Stephan Kampelmann & François Rycx, 2016. "Wage discrimination against immigrants: measurement with firm-level productivity data," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-24, December.
    10. Ayaita, Adam, 2023. "Is There an Ethnic Pay Gap in Germany? Evidence from a Representative Sample of the Adult Population," EconStor Preprints 267865, ZBW - Leibniz Information Centre for Economics.
    11. Andrea Garnero & François Rycx & Isabelle Terraz, 2020. "Productivity and Wage Effects of Firm‐Level Collective Agreements: Evidence from Belgian Linked Panel Data," British Journal of Industrial Relations, London School of Economics, vol. 58(4), pages 936-972, December.
    12. Ramona Schmid, 2023. "Migration and wage inequality: a detailed analysis for German metropolitan and non-metropolitan regions [Migration und Lohnungleichheit: Eine detaillierte Analyse für Deutsche Metropol- und Nicht-M," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 43(1), pages 147-201, April.
    13. MORIKAWA Masayuki, 2017. "Are Part-time Employees Underpaid or Overpaid? Productivity–wage gaps in Japan," Discussion papers 17077, Research Institute of Economy, Trade and Industry (RIETI).
    14. Ortega, Francesc & Hsin, Amy, 2022. "Occupational barriers and the productivity penalty from lack of legal status," Labour Economics, Elsevier, vol. 76(C).
    15. Rycx, François & Saks, Yves & Tojerow, Ilan, 2016. "Misalignment of Productivity and Wages across Regions? Evidence from Belgian Matched Panel Data," IZA Discussion Papers 10336, Institute of Labor Economics (IZA).
    16. Héctor Alberto Botello-Peñaloza, 2021. "Wage Inequality of Venezuelan Migrants in Ecuador," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 64(1), pages 115-132, March.
    17. Romina Giuliano & Stephan Kampelmann & Benoît Mahy & François Rycx, 2017. "Short Notice, Big Difference? The Effect of Temporary Employment on Firm Competitiveness across Sectors," British Journal of Industrial Relations, London School of Economics, vol. 55(2), pages 421-449, June.
    18. Gabdelyakhat R. Latfullin & Oleg F. Gabdrakhmanov & Elena Y. Ivanova-Yakushko & Andrey V. Nazarov, 2020. "Informal Economic Networks in the Services Sector," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 5, pages 156-178.
    19. Meenakshi Fernandes & d'Artis Kancs & Cecilia Navarra, 2021. "Legal migration policy and law," EERI Research Paper Series EERI RP 2021/10, Economics and Econometrics Research Institute (EERI), Brussels.
    20. Schmid, Ramona, 2022. "Migration and wage inequality: A detailed analysis for German regions over time," Hohenheim Discussion Papers in Business, Economics and Social Sciences 04-2022, University of Hohenheim, Faculty of Business, Economics and Social Sciences.
    21. Nicholas Lawson, 2024. "Discrimination and the Fiscal Benefits of Immigration," Working Papers 24-01, Research Group on Human Capital, University of Quebec in Montreal's School of Management.

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