Human Capital Quality and the Immigrant Wage Gap

Serge Coulombe, Gilles Grenier and Serge Nadeau

No 1212E, Working Papers from University of Ottawa, Department of Economics

Abstract: We propose a new methodology for analyzing determinants of the wage gap between immigrants and natives. A Mincerian regression framework is extended to include GDP per capita in an immigrant’s country of birth as a proxy for the quality of education and work experience acquired in that country. In this regard, a central finding is that Canadian immigrants’ returns to schooling and work experience significantly increase with the GDP per capita of their country of birth. The contribution of quality of schooling and work experience to the immigrant wage gap is also examined. It is shown that lower human capital quality completely negates the endowment advantage that immigrants have in the areas of schooling and work experience, so that this factor is key to understanding why they earn less than Canadian natives. Since data on GDP per capita are available for most countries in the world over long periods of time, the proposed methodology can be applied to analyze immigrant wage gaps for a large set of countries for which common statistics on natives and immigrants are available.

Keywords: Wage differentials; immigrants vs. Canadian natives; human capital quality; immigration policies; work experience; education (search for similar items in EconPapers)
JEL-codes: J15 J20 J24 J61 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2012
New Economics Papers: this item is included in nep-hrm, nep-lma and nep-mig
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

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