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Does Better Pre-Migration Performance Accelerate Immigrants' Wage Assimilation?

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  • Hirsch, Boris

    (Leuphana University Lüneburg)

  • Jahn, Elke J.

    (University of Bayreuth)

  • Toomet, Ott

    (University of Tartu)

  • Hochfellner, Daniela

    (Institute for Employment Research (IAB), Nuremberg)

Abstract

This paper analyzes wage assimilation of ethnic German immigrants to Germany. We use unique administrative data that include a standardized measure of immigrants' pre-migration wage based on occupation, industry, tenure, qualification, and the German wage structure. We find that immigrants experience a substantial initial wage disadvantage compared to natives. During their first 15 years in the host country they manage to close a considerable part of this gap, though assimilation is only partial. A 10% higher pre-migration wage translates into a 1.6% higher wage in Germany when also controlling for educational attainment, thus pointing at partial transferability of human capital acquired in the source country to the host country's labor market. We also find that wage assimilation is significantly accelerated for immigrants with a higher pre-migration wage. Our results are in line with strong complementarities between general skills and host country-specific human capital, in particular proficiency in the host country's language.

Suggested Citation

  • Hirsch, Boris & Jahn, Elke J. & Toomet, Ott & Hochfellner, Daniela, 2013. "Does Better Pre-Migration Performance Accelerate Immigrants' Wage Assimilation?," IZA Discussion Papers 7240, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp7240
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    Cited by:

    1. Wapler, Rüdiger & Hochfellner, Daniela, 2014. "Do High-Skilled Immigrants find Jobs Faster than Low-Skilled Immigrants?," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100306, Verein für Socialpolitik / German Economic Association.

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    More about this item

    Keywords

    migration; labor market assimilation; transferability of human capital; ethnic Germans;
    All these keywords.

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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