Labour Studies Index

Why are Relative Wages of Immigrants Declining? A Distributional Approach

Document type Article
Author Boudrabat, Brahim
Author Lemieux, Thomas
Journal ILR Review
Volume 67
Date 2014
ISSN 0019-7939
Pages 1127-1165
URL http://www.wise.xmu.edu.cn/Labor2008/Files/papers/p58_Brahim%20Boudarbat_Why%20are%20the%20Relative%20Wages%20of%20Immigrants%20Declining_A%20Distributional%20Approach.pdf

Abstract

The authors show that the decline in the relative wages of immigrants in Canada is far from homogeneous across the wage distribution. The well-documented decline in the mean wage gap between immigrants and Canadian-born workers hides a much larger decline at the low end of the wage distribution, while the gap hardly changed at the top end of the distribution. Using standard OLS regressions and unconditional quantile regressions, the authors show that both the changes in the mean wage gap and in the gap at different quantiles are well explained by standard factors such as experience, education, and country of origin of immigrants. Interestingly, an important source of change in the wages of immigrants relative to the Canadian born is the aging of the baby boom generation, which has resulted in a relative increase in the labor market experience, and thus in the wages, of Canadian-born workers relative to immigrants.