Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/170875
Authors: 
Jain, Apoorva
Sabirianova Peter, Klara
Year of Publication: 
2017
Series/Report no.: 
IZA Discussion Papers 10891
Abstract: 
This study finds evidence of wage divergence between immigrants and natives in Germany using a country-wide household panel from 1984 to 2014. We incorporate the possibility of wage divergence into a two-period model of economic assimilation by modeling the differences in the efficiency of human capital production and prices per unit of human capital between immigrants and natives. Individual rates of wage convergence are found to be higher for immigrants who fled warfare zones, belong to established ethnic networks, and acquired more years of pre-migration schooling. Using a doubly robust treatment effect estimator and the IV method, the study finds that the endogenous post-migration education in the host country contributes substantially to closing the wage gap with natives. The treatment effect is heterogeneous, favoring immigrants who are similar to natives. This paper also addresses the commonly ignored sample selection issue due to non-random survey attrition and employment participation. Empirical evidence favors the "efficiency" over the "discrimination" channels of wage divergence.
Subjects: 
migration
assimilation
divergence
wage growth
skill prices
post-migration human capital
discrimination
doubly robust estimator
instrumental variables
panel
Germany
JEL: 
J15
J24
J31
J61
F22
I26
Document Type: 
Working Paper

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