The observed wealth differential in favour of native households seems to contradict the analytical presumption of a saving differential in favour of immigrant households. This article seeks to explain the observed differences in wealth through an examination of the respective saving behaviour of immigrants and natives. Quantile regression and semiparametric decomposition methods are used to identify the saving differential and to isolate the factors that contribute to it. The basic finding is that household income is the key to the differential saving pattern. Moreover, decomposition analysis suggests that immigrants have a tendency to save more than natives when compared with Australian‐born households with similar characteristics. We also find evidence of heterogeneity in immigrant saving behaviour depending on household types and countries of origin.
We investigate wage differential by migrant status across white‐collar and blue‐collar occupations in Australia. Migrants are observed to have a higher wage; this difference, however, does not exist once we control for covariates. The unconditional wage differential varies over wage distribution as well as by occupation. Significant wage differentials are found above the median: positive for white‐collar workers and negative for blue‐collar workers. Using recently developed decomposition methods based on Firpo, Fortin, and Lemieux (2009) we decompose wage differentials across their distribution. Overall, the wage advantage of migrants reflects their superior labour market characteristics, and in particular, their levels of education. We find that English language proficiency plays an important role in wage differences among immigrants from non‐English speaking countries.
The current Australian migration program rewards applicants for possessing Australian tertiary qualifications. This study examines whether such qualifications help mitigate the labour market disadvantages faced by immigrants in Australia. The effect of host country qualification on labour market assimilation is estimated by comparing the labour force participation and unemployment of natives with two groups of migrants: those holding foreign qualifications and those holding Australian qualifications. Controlling for factors such as level of education and experience, there is no evidence that Australian qualifications result in better labour market outcomes for migrants.
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