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Human Capital Quality and the Immigrant Wage Gap

Author

Listed:
  • Serge Coulombe

    (Department of Economics, University of Ottawa, 120 University St., Ottawa,Ontario)

  • Gilles Grenier

    (Department of Economics, University of Ottawa, 120 University St., Ottawa,Ontario)

  • Serge Nadeau

    (Department of Economics, University of Ottawa, 120 University St., Ottawa,Ontario)

Abstract

We propose a new methodology for analyzing determinants of the wage gap between immigrants and natives. A Mincerian regression framework is extended to include GDP per capita in an immigrant’s country of birth as a proxy for the quality of education and work experience acquired in that country. In this regard, a central finding is that Canadian immigrants’ returns to schooling and work experience significantly increase with the GDP per capita of their country of birth. The contribution of quality of schooling and work experience to the immigrant wage gap is also examined. It is shown that lower human capital quality completely negates the endowment advantage that immigrants have in the areas of schooling and work experience, so that this factor is key to understanding why they earn less than Canadian natives. Since data on GDP per capita are available for most countries in the world over long periods of time, the proposed methodology can be applied to analyze immigrant wage gaps for a large set of countries for which common statistics on natives and immigrants are available.

Suggested Citation

  • Serge Coulombe & Gilles Grenier & Serge Nadeau, 2012. "Human Capital Quality and the Immigrant Wage Gap," Working Papers 1212E, University of Ottawa, Department of Economics.
    • Handle: RePEc:ott:wpaper:1212e
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    References listed on IDEAS

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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. Serge Coulombe & Gilles Grenier & Serge Nadeau, 2014. "Quality of Work Experience and Economic Development: Estimates Using Canadian Immigrant Data," Journal of Human Capital, University of Chicago Press, vol. 8(3), pages 199-234.
    3. Christl, Michael & Köppl-Turyna, Monika & Gnan, Phillipp, 2017. "Wage differences between immigrants and natives in Austria: The role of literacy skills," Working Papers 12, Agenda Austria.
    4. Marie Albertine Djuikom & Guy Lacroix, 2018. "Dynamic Causal Effects of Post-Migration Schooling on Labour Market Transitions," Cahiers de recherche 1803, Chaire de recherche Industrielle Alliance sur les enjeux économiques des changements démographiques.
    5. Gwyneth Donahue, 2021. "Equal Convergence? Convergence Patterns Among Immigrants by Occupation," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 49(3), pages 293-304, September.
    6. Schiff, Maurice, 2014. "Brain Drain, Educational Quality and Immigration Policy: Impact on Productive Human Capital in Source and Host Countries, with Canada as a Case Study," IZA Discussion Papers 7955, Institute of Labor Economics (IZA).
    7. Susumu Imai & Derek Stacey & Casey Warman, 2019. "From engineer to taxi driver? Language proficiency and the occupational skills of immigrants," Canadian Journal of Economics, Canadian Economics Association, vol. 52(3), pages 914-953, August.
    8. Brunow, Stephan & Jost, Oskar, 2019. "Wages of migrant and native employees in Germany: new light on an old issue," IAB-Discussion Paper 201910, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    9. Feng Hou & Yuqian Lu, 2017. "International students, immigration and earnings growth: the effect of a pre-immigration host-country university education," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 7(1), pages 1-24, December.
    10. Serge Coulombe & Robin Boadway & Michel Beine, 2016. "Moving Parts: Immigration Policy, Internal Migration and Natural Resource Shocks," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 446, March.

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    More about this item

    Keywords

    Wage differentials; immigrants vs. Canadian natives; human capital quality; immigration policies; work experience; education;
    All these keywords.

    JEL classification:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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