Human Capital, Amenities, and Distortions: The Immigrant Earnings Gap across Space

Gabriele Lucchetti

No 26082, RFBerlin Discussion Paper Series from ROCKWOOL Foundation Berlin (RFBerlin)

Abstract: I document that the city-size earnings premium is smaller for immigrants than for natives, driven by low-income-country immigrants, who sort less into cognitive occupations in larger cities. I interpret these facts through a spatial equilibrium model with heterogeneous human capital, amenities, and local earnings wedges. Local earnings wedges are the main channel behind the immigrant-native gap in the city-size earnings premium. Removing all immigrant-native differences closes 62 percent of the immigrant-native earnings gap but widens the spatial earnings gap by 20 percent. Expanding college immigration narrows the workers' earnings gap without widening the spatial earnings gap.

Keywords: Immigrant Earnings Gap; City-Size Earnings Premium; Spatial Equilibrium; Occupational Sorting; Human Capital (search for similar items in EconPapers)
JEL-codes: F22 J24 J31 J61 R13 (search for similar items in EconPapers)
Date: 2026-03
New Economics Papers: this item is included in nep-lma, nep-mig and nep-uep
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