The labour market integration of immigrants and their children

Abstract

This thesis examine three distinct aspects of the labour market integration of immigrants and their children in the host country. The first chapter looks at the early careers of immigrants to shed light on the mechanisms driving the immigrant wage growth in the first years in the host country. I use a unique linked employer employee panel covering all wage earners in the private sector in Portugal to follow the careers of immigrant men. I show that in the first ten years in the country immigrants close one third of the initial immigrant-native wage gap and that one third of this wage catch-up is accounted for by immigrants gaining access to better paying firms. I then suggest an economic assimilation mechanism which highlights imperfect information about immigrant productivity and show that its predictions are in line with the data. The second chapter offers a longer term perspective of the economic assimilation of immigrants by turning to the labour market performance of the second generation. The chapter uses a unique survey of children of immigrants from Turkey, Morocco and ex-Yugoslavia, and children of natives in 15 European cities to closely compare their educational and labor market outcomes. Although the second generation performs on average worse than the children of natives in most outcomes considered, all differences are explained by differences in socio-economic background. While the first chapter focused on the dynamics of the wage gap over time, the third chapter studies the differences in the level of the wage gap across immigrant populations. The chapter provides a comparison of the wage gaps by country of origin in two major host countries, the UK and the US, in order to disentangle country of origin effects from immigrant selection. I show that the wage gaps by country of origin are strongly correlated in the two host countries and that virtually all the correlation is accounted for by differences in country of origin specific returns to education