Study: Immigrants earn about 18 percent less on average than a country’s native population
Immigrants to Europe and North America earn, on average, 17.9 percent less than natives, as they struggle to gain access to jobs in higher-paying industries, occupations and companies. Three-quarters of the pay gap between the two correspond to a lack of access to high-paying jobs for immigrants. These are the findings of a new multinational study published in the journal “Nature”, with contributions from Prof. Dr. Malte Reichelt, Assistant Professor for Computational Social Science with a Focus on Social Dynamics at FAU WiSo and researcher at the Institute for Employment Research (IAB).
Prof. Dr. Malte Reichelt, together with lead author Are Hermansen (University of Oslo) and colleagues analysed data of 13.5 million immigrant and native workers across the following nine countries: Canada, Denmark, France, Germany, the Netherlands, Norway, Spain, Sweden and the USA. They found that three-quarters of the total pay gap between immigrant and native workers can be linked to immigrants’ lack of access to high-paying jobs. This phenomenon was observed consistently in all nine countries analysed, and across immigrants from Asia, Latin America, the Middle East, North Africa and sub-Saharan Africa. The remaining gap of 4.6 percent, on average, was due to immigrants being paid less for the same jobs at the same employers as native individuals.
The largest differences in pay between immigrants and natives were observed in Spain and Canada, where immigrants earned up to 28–29 percent less than natives. The smallest differences in pay between the two groups were observed in the USA, Denmark and Sweden, where immigrants earned 7–11 percent less than natives. In Germany, the pay gap between the two groups was 19.6 percent.
For the second generation, the overall pay gap narrowed to 5.7 percent, on average, but still persisted, especially for children of immigrants from Africa and the Middle East. The within-job difference in pay was 1.1 percent.
These findings illustrate the need for policies for reducing segregation between immigrants and a country’s native population. “The gaps in pay and barriers to higher-paying jobs could be addressed by policies that, for example, target bias in hiring and promotion, as well as job assistance programmes to connect workers to employers,” explains Prof. Dr. Malte Reichelt.
The article can be found on the website of the journal “Nature”.