Immigrant-native pay gap driven by lack of access to high-paying jobs

Are Hermansen (), Andrew Penner, István Boza, Marta Elvira, Olivier Godechot (), Martin Hällsten, Lasse Henriksen, Feng Hou, Zoltán Lippényi, Trond Petersen, Malte Reichelt, Halil Sabanci, Mirna Safi (), Donald Tomaskovic-Devey and Erik Vickstrom
Additional contact information
Andrew Penner: UC Irvine - University of California [Irvine] - UC - University of California
István Boza: Institute of Economics [Budapest] - Research Centre for Economic and Regional Studies - MTA - Hungarian Academy of Sciences
Marta Elvira: UPNA - Universidad Pública de Navarra [Espagne] = Public University of Navarra
Olivier Godechot: Sciences Po - Sciences Po, CRIS - Centre de recherche sur les inégalités sociales (Sciences Po, CNRS) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique
Martin Hällsten: Stockholm University
Lasse Henriksen: Copenhaguen Business School
Feng Hou: Statistics Canada - Statistics Canada
Zoltán Lippényi: University of Groningen [Groningen]
Trond Petersen: UC Berkeley - University of California [Berkeley] - UC - University of California
Mirna Safi: CRIS - Centre de recherche sur les inégalités sociales (Sciences Po, CNRS) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, LIEPP - Laboratoire interdisciplinaire d'évaluation des politiques publiques (Sciences Po) - Sciences Po - Sciences Po
Donald Tomaskovic-Devey: UMass Amherst - University of Massachusetts [Amherst] - UMASS - University of Massachusetts System

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Abstract: Immigrants to high-income countries often face considerable and persistent difficulties in the labour market, whereas their native-born children typically experience economic progress. However, little is known about the extent to which these immigrant–native earnings differences stem from unequal pay when doing the same work for the same employer versus labour market processes that sort immigrants into lower-paid jobs. Here, using data from nine European and North American countries, we show that the segregation of workers with immigrant backgrounds into lower-paying jobs accounts for about three-quarters of overall immigrant–native earnings differences. Although within-job pay inequality remains notable for immigrants in several countries, our results demonstrate that unequal access to higher-paying jobs is the primary driver of the immigrant–native pay gap across a range of institutionally and demographically diverse contexts. These findings highlight the importance of policies aimed at reducing between-job segregation, such as language training, job training, job search assistance programmes, improving access to domestic education, recognizing foreign qualifications, and settlement programmes aimed at enhancing access to job-relevant information and networks. Policies that target employer bias in hiring and promotion decisions are also likely to be effective, whereas measures aimed at ensuring equal pay for equal work may have more limited scope for further progress in closing the immigrant–native pay gap.

Keywords: Segregation at work; Immigrants wages; Labour Market; Economic Inequalities; Pay gap (search for similar items in EconPapers)
Date: 2025-07-16
Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-05216909v1
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Published in Nature, 2025, ⟨10.1038/s41586-025-09259-6⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05216909

DOI: 10.1038/s41586-025-09259-6

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