Immigrants at new destinations: how they fare and why
We explore matched employer–employee data for a new destination of international migrants in Europe—Portugal. We conclude that the difference between the earnings of immigrants and natives with similar personal characteristics is for the most part due to the characteristics of the matches they form, immigrants being penalized on two different counts: absence of match-specific human capital and occupational downgrading. Moreover, we show that non-random sorting across workplaces has a significant detrimental effect on immigrants’ wages. This is the flip side of joining migrant-crowded workplaces.
KeywordsImmigrants’ earnings Workplace concentration of immigrants Matched employer–employee data
JEL ClassificationJ15 J61 J71
CEF.UP—Center for Economics and Finance at University of Porto—is supported by the Fundação para a Ciência e Tecnologia (FCT), Portugal. We would like to thank Alessandra Venturini, Barry Chiswick, Carmel Chiswick, Catalina Amuedo-Dorantes, Guillermina Jasso, Paulo Guimarães, and three anonymous referees for comments on earlier versions of the paper. Financial support from Fundação para a Ciência e a Tecnologia (Research grant no. PIQS/ECO/50044/2003) is deeply appreciated. We also thank the Gabinete de Estratégia e Planeamento do Ministério do Trabalho e da Solidariedade Social, which kindly allowed us to use the data.
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