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IFAU - Institute for Evaluation of Labour Market and Education Policy

Abstract: This article uses a matched employer-employee panel data of the Swedish labor market to study immigrant wage assimilation, decomposing the wage catch-up into parts which can be attributed to relative wage growth within and between workplaces and occupations. This study shows that failing to control for selection into employment when studying wage assimilation of immigrants is very likely to under-estimate wage catch-up. The results further show that both poorly and highly educated immigrants catch up through relative wage growth within workplaces and occupations, suggesting that employer-specic learning plays an important role for the wage catch-up. The highly educated suffers from not benefiting from occupational mobility as much as the natives do. This could be interpreted as a lack of access to the full range of occupations, possibly explained by difficulties in signaling specific skills.

Keywords: Firm sorting; occupational mobility; wage assimilation; host country specific human capital; employer learning

JEL-codes: D22; D31; J01; J31; J71

40 pages, March 14, 2013

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wp2013-07-Decomposin...age-assimilation.pdf  

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