The Immigrant-Native Gap in Labor Market Earnings and Total Net Income across European Countries

Alicia Adsera, University of Illinois at Chicago and University of Chicago
Barry R. Chiswick, University of Illinois at Chicago

The paper uses the 1994-2000 waves of the European Community Household Panel to analyze both work earnings and net income of immigrants as compared to natives across 15 European Union countries. Immigrant individual work earnings are 40% lower than those of natives at the time of arrival in the pooled sample. Differences vary across countries, with migrants in Germany and Portugal faring the best relative to natives and those in Sweden, Denmark, Luxembourg or Spain the worst, particularly for non-EU born migrants. By continent, Asian men followed by Latin-American and Eastern European men receive the lowest earnings. Latin-American and Eastern European women are at the bottom of the distribution. Differences between immigrants and natives are notably lower in terms of total net income. The immigrant-native gap is relatively smaller in Nordic countries but still sizable in Southern Europe. This denotes important differences in the workings of the welfare state across countries.