Wage Differentials between Immigrants and the Native-Born in Australia

52 Pages Posted: 19 Dec 2012 Last revised: 13 Apr 2013

See all articles by Lixin Cai

Lixin Cai

University of Melbourne - Melbourne Institute: Applied Economic & Social Research

Amy Y.C. Liu

Crawford School of Public Policy

Date Written: December 18, 2012

Abstract

This study examines the wage differentials along the entire distribution between immigrants and the Australian-born. The results show that the productivity characteristics and the returns to the characteristics reinforce each other for immigrants from English-speaking countries, putting them in a favourable position relative to the native-born. Male immigrants from non-English-speaking (NESC) have little wage difference from their native-born counterparts since their favourable productivity characteristics are offset by disadvantage in the returns to the characteristics. Female immigrants from NESC are advantaged at the upper but disadvantaged at the lower part of the wage distribution relative to their native-born counterparts. Our results suggest that the increasingly skill-based immigration policy in Australia has resulted in increasing skill levels of immigrants relative to the Australian born. However, due to unfavourable rewards to their productivity factors NESC immigrants, especially males, earn less than the Australian born.

Keywords: Immigrants, quantile regression, decomposition

JEL Classification: J31, J45

Suggested Citation

Cai, Lixin and Liu, Amy Y.C., Wage Differentials between Immigrants and the Native-Born in Australia (December 18, 2012). Crawford School Research Paper No. 12-12, Available at SSRN: https://ssrn.com/abstract=2191209 or http://dx.doi.org/10.2139/ssrn.2191209

Lixin Cai

University of Melbourne - Melbourne Institute: Applied Economic & Social Research ( email )

Level 5, FBE Building, 111 Barry Street
Parkville, Victoria 3010
Australia

Amy Y.C. Liu (Contact Author)

Crawford School of Public Policy ( email )

ANU College of Asia and the Pacific
Canberra, Australian Capital Territory 0200
Australia
61-2-6125 0177 (Phone)

HOME PAGE: http://crawford.anu.edu.au/crawford_people/content/staff/aliu.php

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