Details
| Original language | English |
|---|---|
| Pages (from-to) | 490-517 |
| Number of pages | 28 |
| Journal | Jahrbucher fur Nationalokonomie und Statistik |
| Volume | 232 |
| Issue number | 5 |
| Publication status | Published - 2012 |
Abstract
Immigrant-native wage differentials are observed in many countries, so in Germany. However, the available empirical literature for Germany defined the groups in consideration, immigrants and natives, by citizenship. This limits the explanatory power of the estimates since citizenship distinguishes foreigners and German nationals, but assigns naturalised immigrants (including the large group of ethnic Germans) to the latter group. Providing a more adequate definition based on the concept of origin we analyse the immigrant-native wage gap. Based on data from the German Socio-Economic Panel Study, we decompose the wage gap between native Germans, foreigners, and naturalised immigrants, and consider further subgroups in the analysis. In the literature, time of residence has been proven to be a relevant determinant of immigrants' wages. For the natives, time of residence is perfectly collinear with age, and unequal sets of variables have to be considered. We therefore suggest an extension of the Oaxaca-Blinder decomposition technique. Our results show a substantial gap in earnings for all immigrants' groups compared to natives. Discarding immigrants who completed education abroad reduces much of the immigrants' wage gap. Hence, educational attainment in Germany is an important component of economic integration of immigrants, and degrees obtained abroad are valued less.
Keywords
- Decomposition, Educational attainment, Germany, Immigration, SOEP, Wage gap
ASJC Scopus subject areas
- Business, Management and Accounting(all)
- Social Sciences(all)
- Social Sciences (miscellaneous)
- Economics, Econometrics and Finance(all)
- Economics and Econometrics
Sustainable Development Goals
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In: Jahrbucher fur Nationalokonomie und Statistik, Vol. 232, No. 5, 2012, p. 490-517.
Research output: Contribution to journal › Article › Research › peer review
}
TY - JOUR
T1 - The immigrant-native wage gap in Germany
AU - Aldashev, Alisher
AU - Gernandt, Johannes
AU - Thomsen, Stephan L.
PY - 2012
Y1 - 2012
N2 - Immigrant-native wage differentials are observed in many countries, so in Germany. However, the available empirical literature for Germany defined the groups in consideration, immigrants and natives, by citizenship. This limits the explanatory power of the estimates since citizenship distinguishes foreigners and German nationals, but assigns naturalised immigrants (including the large group of ethnic Germans) to the latter group. Providing a more adequate definition based on the concept of origin we analyse the immigrant-native wage gap. Based on data from the German Socio-Economic Panel Study, we decompose the wage gap between native Germans, foreigners, and naturalised immigrants, and consider further subgroups in the analysis. In the literature, time of residence has been proven to be a relevant determinant of immigrants' wages. For the natives, time of residence is perfectly collinear with age, and unequal sets of variables have to be considered. We therefore suggest an extension of the Oaxaca-Blinder decomposition technique. Our results show a substantial gap in earnings for all immigrants' groups compared to natives. Discarding immigrants who completed education abroad reduces much of the immigrants' wage gap. Hence, educational attainment in Germany is an important component of economic integration of immigrants, and degrees obtained abroad are valued less.
AB - Immigrant-native wage differentials are observed in many countries, so in Germany. However, the available empirical literature for Germany defined the groups in consideration, immigrants and natives, by citizenship. This limits the explanatory power of the estimates since citizenship distinguishes foreigners and German nationals, but assigns naturalised immigrants (including the large group of ethnic Germans) to the latter group. Providing a more adequate definition based on the concept of origin we analyse the immigrant-native wage gap. Based on data from the German Socio-Economic Panel Study, we decompose the wage gap between native Germans, foreigners, and naturalised immigrants, and consider further subgroups in the analysis. In the literature, time of residence has been proven to be a relevant determinant of immigrants' wages. For the natives, time of residence is perfectly collinear with age, and unequal sets of variables have to be considered. We therefore suggest an extension of the Oaxaca-Blinder decomposition technique. Our results show a substantial gap in earnings for all immigrants' groups compared to natives. Discarding immigrants who completed education abroad reduces much of the immigrants' wage gap. Hence, educational attainment in Germany is an important component of economic integration of immigrants, and degrees obtained abroad are valued less.
KW - Decomposition
KW - Educational attainment
KW - Germany
KW - Immigration
KW - SOEP
KW - Wage gap
UR - http://www.scopus.com/inward/record.url?scp=84869430781&partnerID=8YFLogxK
U2 - 10.1515/jbnst-2012-0502
DO - 10.1515/jbnst-2012-0502
M3 - Article
AN - SCOPUS:84869430781
VL - 232
SP - 490
EP - 517
JO - Jahrbucher fur Nationalokonomie und Statistik
JF - Jahrbucher fur Nationalokonomie und Statistik
SN - 0021-4027
IS - 5
ER -