This text has been translated from Norwegian with the assistance of GPT UiO.
Why do immigrants often earn less than the majority population? A common pattern emerges across the nine countries examined in the study that Are Skeie Hermansen, a professor of sociology at the University of Oslo, and his research colleagues recently published in Nature—a globally esteemed research journal.
The main finding is that wage differences are not due to lower pay in the same positions but are largely because immigrants tend to accept jobs in lower-paid industries, professions, and companies.
– The size of the wage gap varies from country to country, but the underlying mechanism remains consistent, states Hermansen.
– The difference in access, namely that people are employed in different workplaces with varied positions offering different wage levels, explains the majority of the gap.
Differences in the same job only three percent
Researchers utilised detailed employer data from Spain, Canada, Germany, France, the USA, Denmark, Sweden, and Norway. Across these countries, immigrants earn on average 18 per cent less than the majority population, after adjusting for factors such as education level and local labour market conditions, while differences at the job level are under 5 per cent.
– For descendants of immigrants, the adjusted income disparities are 6 per cent, whereas differences relative to majority colleagues with the same occupation and the same employer are extremely small—averaging about 1 per cent, Hermansen explains.
Norway fits the same pattern: immigrants earn on average about 20 per cent less than equally qualified members of the majority population, whereas differences in the same job are only 3 per cent. For Norwegian-born descendants of immigrants, this wage gap is 9 per cent, while the differences at the job level are 1 per cent.
– Unequal pay for equal work accounts for less than one-fifth of the total wage differences across both immigrant generations.
New insight into the mechanisms behind wage disparities
This marks the first occasion where researchers compare the wage gap between immigrants and the majority population at the job level. The study demonstrates that the sorting into different jobs holds greater significance than differentials in wages, and this applies to all the high-income countries in the study—despite variations in demographics and labour market institutions.
– A new and significant conclusion of the study is that wage differences between immigrants and the majority population are minimal when they hold the same job in the same organisation. There is little support for the notion that direct pay discrimination—namely unequal pay for equal work—is a key explanation for the wage gap, Hermansen asserts.
This might seem paradoxical, given the well-documented discrimination many immigrants face in recruitment processes.
– A likely explanation is that it is generally easier to discriminate in hiring decisions—who gets access to a position—than in how wages are determined. Wage setting often occurs according to standard rates, through regulated processes, or in contexts with greater transparency and oversight.
Focus on barriers obstructing access to well-paid jobs
The study does not provide detailed information on the specific reasons for job sorting, but offers an overview of the key processes.
– If the goal is to reduce the wage gap, we need to focus on the barriers preventing immigrants from securing well-paying jobs, Hermansen advises.
– It may involve a lack of skills and qualifications, education and language, but also a deficiency in information and networks, job-seeking behaviour, and employer discrimination.
The study also indicates that a significant portion of income disparities arises from sorting into different jobs within the same employer, and not solely through varying access to different industries, occupations, and workplaces.
– This suggests the crucial need to understand the mechanisms that explain how and why unequal job placement upon hiring serves as a primary source of wage differences.
Integration works over time
Simultaneously, the study indicates that the wage gap—both overall and at the job level—becomes substantially smaller for descendants of immigrants, who often have better language skills and education from the country they grew up in.
However, the findings also show that wage disparities are generally narrower for immigrants from Europe, North America, and other Western countries compared to those from Asia, South America, the Middle East, and Africa.
Are Skeie Hermansen highlights the importance of proper language education, recognition of foreign qualifications, as well as job-search courses and measures against discrimination at various stages of the recruitment process.
– Our findings reveal that integration processes are effective over time. Therefore, our main conclusion is that prioritising policies to improve immigrants' opportunities, particularly with regard to language, education, and networking, is vital, he concludes.
The researcher has previously identified that women continue to receive lower pay for the same work compared to men. This is thus less the case for immigrants, and even less for their descendants. This bodes well for the migrant population's prospects in the labour market.
– Although measures to ensure equal pay for equal work are important, our research indicates that policies to dismantle barriers in access to good jobs will yield greater benefits in reducing wage disparities between immigrants and the majority.