Does Better Pre-Migration Performance Accelerate Immigrants' Wage Assimilation?

37 Pages Posted: 9 Mar 2013

See all articles by Boris Hirsch

Boris Hirsch

University of Erlangen-Nuremberg

Elke J. Jahn

Institute for Employment Research (IAB); University of Bayreuth; IZA Institute of Labor Economics

Ott Toomet

University of Aarhus; Tartu University

Daniela Hochfellner

Government of the Federal Republic of Germany - Institute for Employment Research (IAB)

Abstract

This paper analyzes wage assimilation of ethnic German immigrants to Germany. We use unique administrative data that include a standardized measure of immigrants' pre-migration wage based on occupation, industry, tenure, qualification, and the German wage structure. We find that immigrants experience a substantial initial wage disadvantage compared to natives. During their first 15 years in the host country they manage to close a considerable part of this gap, though assimilation is only partial. A 10% higher pre-migration wage translates into a 1.6% higher wage in Germany when also controlling for educational attainment, thus pointing at partial transferability of human capital acquired in the source country to the host country's labor market.We also find that wage assimilation is significantly accelerated for immigrants with a higher pre-migration wage. Our results are in line with strong complementarities between general skills and host country-specific human capital, in particular proficiency in the host country's language.

Keywords: migration, labor market assimilation, ethnic Germans, transferability of human capital

JEL Classification: J61, J31, J24

Suggested Citation

Hirsch, Boris and Jahn, Elke J. and Toomet, Ott and Hochfellner, Daniela, Does Better Pre-Migration Performance Accelerate Immigrants' Wage Assimilation?. IZA Discussion Paper No. 7240, Available at SSRN: https://ssrn.com/abstract=2230802

Boris Hirsch (Contact Author)

University of Erlangen-Nuremberg ( email )

SchloƟplatz 4
Erlangen, DE Bavaria 91054
Germany

HOME PAGE: http://www.arbeitsmarkt.wiso.uni-erlangen.de/english/hirsch_e.htm

Elke J. Jahn

Institute for Employment Research (IAB) ( email )

Regensburger Str. 104
Nuremberg, 90478
Germany

University of Bayreuth ( email )

Bayreuth, 95447
Germany

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Ott Toomet

University of Aarhus ( email )

Nordre Ringgade 1
DK-8000 Aarhus C, 8000
Denmark

Tartu University ( email )

Narva 4-A123
Tartu, 51009
Estonia
+372 737 6374 (Phone)
+372 737 6312 (Fax)

HOME PAGE: http://www.obs.ee/~siim

Daniela Hochfellner

Government of the Federal Republic of Germany - Institute for Employment Research (IAB) ( email )

Germany

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
23
Abstract Views
492
PlumX Metrics