Abstract
The 1994–2000 waves of the European Community Household Panel are used to study the earnings of immigrants as compared to native workers in 15 European countries. At the time of arrival, there is a significant negative partial effect of foreign birth on individual earnings compared to the native born in the destination of around 40%. These differences vary across origins and destinations and by gender. Immigrant earnings catch-up to those of the native born after around 18 years in the destination. Schooling matters more for earnings for women, whereas, language skills are relatively more important for men.
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Notes
Chiswick (1980) developed tests of whether the positive effect of duration on earnings found in the 1970 Census cross-sectional data represented true life cycle effects. The tests indicated that they did. It will be inferred that the patterns found in the cross-sectional ECHP data also represent life-cycle developments.
Although there are exceptions, the research on female immigrants’ labor market experience has focused on labor supply. In addition to the other papers cited above, see for example, Blau (1980), Biswal (1999), Boyle, Cooke, Halfracree and Smith (2001), Cobb-Clark and Crossley (2004), Cobb-Clark and Connolly (2001), Duleep and Sanders (1993), Evans (1984), and Reimers (1985). For analyses of the earnings of female migrants see also Antecol, Cobb-Clark and Trejo (2003), LeClere and McLaughlin (1997) and MacPherson and Stewart (1989).
Some countries were not included in the first wave but were added later (Austria in wave 2, Finland in wave 3, and Sweden in wave 4).
In each wave, data are not available to control for the weeks worked per year or the hours worked per week in the year for which annual earnings are recorded.
In the case of Luxembourg and the UK this is due to the lack of (or reduced) information on year of arrival in Waves 4 to 7, when the PSELL and BHPS datasets are used instead of the original ECHP.
Similar regressions were also computed using experience calculated as age minus the reported age at first job. (In cases where information was missing, the constructed measured of experience, described in the text, was used.) These two measures are highly correlated. The results do not vary with the measure of experience and are available from the authors by request.
Still the tremendous influx of immigration experienced by Southern European countries, particularly Spain, during the last five years is not included in the sample given the time period it covers.
Table A2 in the Appendix presents the proportion of adult individuals from the complete ECHP dataset that report positive work income by country. Differences across countries for males are relatively small. The proportion of migrant men with positive earnings is relatively close to that of natives in their destination country, though slightly lower in Nordic countries and the Netherlands. The proportion of females with positive earnings, however, ranges from a low of 27% and 29% in Greece and Spain to a high of 73% and 72% in Finland and Sweden. Female migrants are slightly more likely to receive work income, particularly in the countries with low labor force participation. Conversely in Nordic countries, which have very high native female participation rates, their attachment to the labor force is weaker than that of natives.
Analyses were conducted using the Heckman selectivity correction technique to adjust for sample (labor force participation) selectivity. Among males, there was no apparent selectivity. Among females, however, lambda showed considerable instability, but the basic patterns were subject to little change. The selectivity correction analyses are not reported in this paper.
The percent difference in earnings (b) equals exp (b*)−1 where b* is the regression coefficient. The parameter, b, is approximately equal to b* only when b is small.
See Lundberg and Rose (2000) for a recent analysis of the effect of intermittent careers on women’s earnings.
This is quite similar to the United States where the earnings catch up for economic migrants is about 15 years, other measured variables the same (Chiswick 1979, 1986). Others find evidence of a catch up for female migrants: Blau (1980) among women in the early 20th century waves of migration to the US and Field-Hendrey and Balkan (1991) in the 1970 and 1980 US Census. Interestingly, there does not appear to be a difference in the effect of duration in the destination on earnings across gender as Beach and Worswick (1993) find in the Canadian data.
A similar phenomenon is found in Canada where immigrants to French-speaking Quebec come disproportionately from Romance language countries of origin.
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Acknowledgements
We appreciate comments received from two anonymous referees and from participants at the 2004 Midwest Economics Association Annual Meetings and at the 2005 Meetings of the Society of Labor Economists, and the financial support provided by the Graduate College Research Board, University of Illinois at Chicago, as well as the University of Illinois Institute of Government and Public Affairs and the Grant Numbers P30-HD18288 and T32-HD007302 from the NICHD.
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Adsera, A., Chiswick, B.R. Are there gender and country of origin differences in immigrant labor market outcomes across European destinations?. J Popul Econ 20, 495–526 (2007). https://doi.org/10.1007/s00148-006-0082-y
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DOI: https://doi.org/10.1007/s00148-006-0082-y