The Immigrant Wage Differential within and across Establishments

Abstract

Using 1999 and 2001 Canadian matched employer-employee data with rich information on worker and job characteristics, the authors identify the relative importance of immigrant wage differentials within and across establishments and the sources of these differentials. Whereas existing explanations of immigrant wage differentials emphasize immigrants' productive characteristics, differentials across establishments may be entirely independent of immigrants' actual or perceived skills or quality. The findings show highly non-random sorting of immigrants across establishments within Canada's major cities and geographic regions. For immigrant men, this sorting affected wage differentials more than did differences in how immigrant and native men were paid within establishments. For immigrant women, however, particularly those from less developed world regions, within-establishment wage differentials appear to have been more important. These findings raise numerous important questions for future research, such as whether the highly non-random sorting of immigrants across establishments primarily reflects immigrants' search behavior or employers' recruiting methods.

Are Immigrants’ Pay and Benefits Satisfaction Different than Canadian-born?

“…Thus, as hypothesized, immigrant status has a direct effect on lower pay and benefits satisfaction, and more recent immigrants tend to have lower pay and benefit satisfaction levels. These findings mirror the wage gap research examining Canada (Aydemir and Skuterud, 2008;Banerjee, 2009), and given the wage gap identified between native-born workers and immigrants in other developed countries (Chiswick and Miller, 2009;Elliott and Lindley, 2008), our research suggests possible pay and benefit satisfaction gaps in those jurisdictions even after controlling for compensation-related factors, personal, human capital, job, and workplace characteristics.…”

“…Among the immigrant cohorts, those arriving prior to 1965 had significantly (p < .05) higher scores than the most recent 1996 to 2005 cohort. The "convergence" of pay and benefit satisfaction between the earliest cohort of immigrants with Canadianborn workers and an increasing pay and benefits gap between Canadian-born and more recent immigrant cohorts mirrors the earnings differentials between non-immigrant and immigrant workers that have been appearing in Canada (Aydemir and Skuterud, 2008;Banerjee, 2009). …”

Immigration: What About the Children and Grandchildren?

“…While focusing on the first generation, Aydemir and Skuterud (2008) look at closely related issues. Using matched employee and employer data, they find that immigrants are non-randomly allocated across establishments and that across, rather than within, establishment wage gaps are the major component of the overall native born-immigrant wage differential.…”

Wage discrimination against immigrants: measurement with firm-level productivity data

“…Similarly, find no wage discrimination but modest occupational segregation in their matched employer-employee data from France. Aydemir and Skuterud (2008) use Canadian matched employer-employee data to document non-random sorting of immigrants into firms that pay lower wages, an effect that appears to be stronger for immigrant men than for women. Peri and Sparber (2008, p. 135) use US Census data from 1960-2000 to show that foreign-born workers appear to specialize in manual and physically demanding occupations while natives sort into jobs requiring intensive communication and language skills, which can be interpreted as sorting into jobs with different productivity.…”

“…What type of technology does the firm use? etc.-a small strand of the literature started to explore wage discrimination against immigrants with firm-level data Aydemir and Skuterud 2008).…”