Over time, immigrants tend to earn lower wages compared to their native-born counterparts in successive generations.
In a recent study, researchers have highlighted the persistent issue of wage gaps for second-generation migrants in Germany, with the country's average standing slightly above the international average. The study, which analysed data from 13.5 million migrants and native workers in nine countries, found that Germany's second-generation wage gap is about 7.7%, compared to an average of 5.7% observed across the countries studied.
The wage gaps for second-generation migrants vary across countries, with Norway having the largest gap at 8.7%, followed by the Netherlands at 5.5%, Sweden at 5.3%, Denmark at 5.2%, and Canada at 1.9%. This indicates that while Germany's gap is moderate, it is higher than in countries like Canada, Denmark, and Sweden.
For context, the first-generation immigrant wage gaps are considerably larger, with Germany having about a 19.6% gap, placing it in the middle range compared to other countries such as Spain and Canada with gaps near 28-29%, and the US, Denmark, and Sweden with smaller gaps (7-11%).
The majority of the wage gap for immigrants and their descendants is attributed to occupational and sectoral sorting, meaning immigrants and their children are more concentrated in lower-paying jobs and companies. Only a smaller portion of the gap is due to lower pay for performing the same work.
While the wage disparity decreases from the first to the second generation, it persists, especially for children of immigrants from Africa and the Middle East. Malte Reichelt, a co-author of the study from IAB, stated that breaking down structural barriers to well-paid employment areas is crucial.
The study found that three-quarters of the wage difference in Germany is decisive for restricted access to better-paid sectors, professions, and companies. Internationally, the decline in wage gaps varies significantly among the second generation, with the largest decline in Norway at 8.7%, and the smallest in Canada at 1.9%.
The wage gap between migrants and natives is also present in eight other countries: Canada, Denmark, France, Netherlands, Norway, Spain, Sweden, and the USA. France and the Netherlands have wage gaps of 18.9% and 15.4% respectively in the first generation. Spain has the largest wage gap in the first generation of migrants, with 29.3%, followed by Canada with 27.5%. The wage gap is much smaller in the USA with 10.6%, Denmark with 9.2%, and Sweden with 7% in the first generation.
In conclusion, the study highlights widespread challenges in pay equity for immigrant descendants across developed countries, with labor market segregation being a primary driver of disparities. Germany's second-generation migrant wage gap, while moderate, is higher than the average but lower than the first generation's gap, with Canada showing the smallest second-generation gap and Norway the largest among the reported countries. Efforts to break down structural barriers, recognise foreign qualifications, expand professional networks, and provide better information are crucial in addressing this issue.
- Tobreak down structural barriers in better-paid employment sectors, it's essential for Germany to implement measures that recognize foreign qualifications, expand professional networks, and provide better information, as shown by Malte Reichelt's statements from the study.
- Despite a decrease in the wage gap from the first to the second generation, finance-related issues persist, with the difference in Germany largely impacting access to well-paid business sectors, according to the research findings.
