On the foreign to native wage differential in Germany: Does the home country matter?

Arbeitspapier

The German labour force is expected to shrink in the next two decades due to a decline in population. Therefore, the immigration of workers from abroad could compensate potential negative effects of such decline. Is Germany competitive for immigration - i. e., do German employers pay enough to make it attractive as a destination country? We explore the wage gap between foreigners and German employees in particular and focus on different countries of origin to better understand issues related to wage setting among these groups. For this purpose, a threefold Oaxaca-Blinder decomposition is performed using a comprehensive data with a vast amount of information on a large number of workers and firms. The results suggest that most of the wage gap can be explained by observed characteristics, and in most cases, very little difference remains unexplained. We provide evidence on differences specific to the country of origin which could be taken in into consideration to attract people from abroad to better integrate them into the German labour market.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IAB-Discussion Paper ; No. 26/2020

Classification and Topics

• Classification: Wirtschaft ; Wage Level and Structure; Wage Differentials ; Mobility, Unemployment, Vacancies, and Immigrant Workers: General ; Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics
• Subject: Migrant pay gap ; country specific wage gap ; inequality ; Oaxaca-Blinder decomposition

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Brunow, Stephan ; Jost, Oskar
• Event: Veröffentlichung
• (who): Institut für Arbeitsmarkt- und Berufsforschung (IAB)
• (where): Nürnberg
• (when): 2020

Further information

• Handle: http://hdl.handle.net/10419/234284
• Last update: 10.03.2025, 11:42 AM CET