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

Immigrants to high-income countries often face considerable and persistent difficulties in the labour market<sup>1-6</sup>, whereas their native-born children typically experience economic progress<sup>6-9</sup>. 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<sup>10-13</sup>, job training<sup>13-15</sup>, job search assistance programmes<sup>13,15</sup>, improving access to domestic education<sup>13,16,17</sup>, recognizing foreign qualifications<sup>18,19</sup>, and settlement programmes aimed at enhancing access to job-relevant information and networks<sup>13,20,21</sup>. 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<sup>22-28</sup>.

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Publication Details

Journal
Nature
Published
2025-07-16
DOI
https://doi.org/10.1038/s41586-025-09259-6
Citations
9
Primary Topic
Migration and Labor Dynamics
Type
article
Field-Weighted Citation Impact
37.81

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article

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

Olivier Godechot, Erik Vickstrom, Feng Hou, Malte Reichelt et al.
9 citations
Nature
Migration and Labor Dynamics
37.81
article

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

Olivier Godechot, Erik Vickstrom, Feng Hou, Malte Reichelt, Mirna Safi, Halil Sabanci, Martin Hällsten, Donald Tomaskovic‐Devey, Andrew M. Penner, Marta M. Elvira, Lasse Folke Henriksen, Are Skeie Hermansen, Zoltán Lippényi, István Boza, Trond Petersen
article en
9 citations

Abstract

Immigrants to high-income countries often face considerable and persistent difficulties in the labour market<sup>1-6</sup>, whereas their native-born children typically experience economic progress<sup>6-9</sup>. 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<sup>10-13</sup>, job training<sup>13-15</sup>, job search assistance programmes<sup>13,15</sup>, improving access to domestic education<sup>13,16,17</sup>, recognizing foreign qualifications<sup>18,19</sup>, and settlement programmes aimed at enhancing access to job-relevant information and networks<sup>13,20,21</sup>. 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<sup>22-28</sup>.

NatureVol. 644(8078)
Centre National de la Recherche Scientifique (FR), Statistics Canada (CA), United States Census Bureau (US), Stockholm University (SE), University of Groningen (NL), Copenhagen Business School (DK), Friedrich-Alexander-Universität Erlangen-Nürnberg (DE), University of Oslo (NO), University of California, Irvine (US), Institut d'Etudes Politiques de Paris (FR), University of Massachusetts Amherst (US), Institut für Arbeitsmarkt und Berufsforschung (DE), Swedish Institute (SE), Leibniz Institute for Educational Trajectories (DE), ELTE Centre for Economic and Regional Studies (HU), IESE Business School (ES), Frankfurt School of Finance & Management (DE), Universidad de Navarra (ES), University of California, Berkeley (US)
National Science Foundation, Institut für Arbeitsmarkt- und Berufsforschung, European Commission, Agence Nationale de la Recherche, Ministerio de Ciencia e Innovación, Norges Forskningsråd, University of California, Irvine, Agencia Estatal de Investigación, Center for Advanced Study, University of Illinois at Urbana-Champaign
Decent work and economic growth
Openalex Percentile: Top 0%
Migration and Labor Dynamics
37.81
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