Immigrant Earnings: Decrease Over Successive Generations
In a comprehensive study analysing the earnings of migrants and native workers in nine countries, it has been found that migrants, on average, earn less than their native counterparts, primarily due to limited access to high-paying jobs rather than direct wage discrimination.
The study, commissioned by the journal "Nature" and conducted by researchers from the Nuremberg Institute for Employment Research (IAB), involved data from 13.5 million individuals. The countries under scrutiny, apart from Germany, include Canada, Denmark, France, the Netherlands, Norway, Spain, Sweden, and the USA.
In Germany, the first-generation wage gap stands at 19.6%, a significant disparity compared to the native population. However, as we move to the second generation, the gap narrows, averaging 7.7%, but persists, particularly for those with African and Middle Eastern backgrounds.
The study reveals that Norway has the largest decline in the second-generation wage gap compared to the first, with a gap of 8.7% for the second generation, significantly smaller than the 19.6% for the first. In contrast, countries like Canada and Spain exhibit much larger gaps in the second generation, with Canada's gap at 1.9% and Spain's at 10.6%.
The findings suggest that sector and firm concentration play a significant role in the wage gap. Immigrants are more likely to work in low-wage industries and at companies that pay less overall, reducing their average earnings. Additionally, structural obstacles prevent many migrants from accessing better-paid roles, impacting overall wage parity more than direct wage discrimination for the same work.
Malte Reichelt, a co-author of the study from IAB, stated that integration isn't just about equal pay for equal work, but breaking down structural barriers to well-paid employment areas. To address these challenges, language promotion, recognition of foreign qualifications, expansion of professional networks, and better information provision are crucial.
Interestingly, Denmark and Sweden have a second-generation wage gap of 9.2% and 7% respectively, smaller than Germany but still present. The smallest second-generation wage gap among the countries mentioned is found in Canada, at 1.9%.
As we strive for a more equitable society, it is essential to acknowledge and address the factors contributing to the wage gap experienced by migrants. By breaking down these structural barriers, we can help ensure a fairer and more inclusive labour market for all.
The research study, commissioned by "Nature" and led by the Nuremberg Institute for Employment Research (IAB), reveals that economic and social policy measures, such as breaking down structural barriers to well-paid employment sectors, are crucial for addressing the wage gap between migrants and native workers. This is particularly important in finance and business sectors, where immigrants may face reduced access to high-paying jobs and more concentration in low-wage industries. The study also highlights the importance of language promotion, recognition of foreign qualifications, expanding professional networks, and better information provision to achieve wage parity and a more equitable society.
