Immigrants in Europe and North America earn less than the natives, study finds

Economic Times

3 days ago

Agencies Immigrants in high-income countries across Europe and North America earn significantly less than native-born workers, largely due to being concentrated in lower-paying roles. A study published in Nature shows that 'between-job segregation' explains nearly 75% of the earnings difference. Only one-quarter of the gap is due to immigrants being paid less for doing the same work.
Findings based on data from 13.5 million workers
The researchers used administrative records from nine countries, Canada, the United States, Germany, France, Spain, Sweden, Denmark, the Netherlands, and Norway. 'Immigrants earn 17.9% less per year than natives on average after adjusting for education, age, gender and work location,' the study reports. However, when comparing workers in the same job and company, the earnings difference drops to 4.6%.
Wider gaps in some countries, narrower in others
Spain and Canada show the largest pay gaps, with immigrants earning 28–29% less than native workers. The United States, Denmark, and Sweden record the smallest differences, between 7% and 11%. In Sweden, no significant within-job wage gap was found.
Second generation shows signs of progress
Children of immigrants born in destination countries earn closer to native wages. After basic adjustments, they earn 5.7% less on average, and the gap reduces to 1.1% when comparing those in the same occupation and company. Intergenerational progress is visible across all countries studied.
Region of origin matters
Earnings gaps vary widely by immigrants' regions of origin. Immigrants from Sub-Saharan Africa and the Middle East and North Africa earn 24–26% less than natives. Workers from Asia and Latin America earn 19–20% less, while immigrants from Western countries face a 9% gap. Within-job pay gaps also follow this pattern.
Policy focus must shift to job access
The researchers argue that current policies focused on equal pay for equal work are not enough. 'Limited access to high-paying jobs, not unequal pay within jobs is the main reason why immigrants earn less,' the report states. It calls for targeted measures such as language training, job placement assistance, credential recognition, and employer reforms to reduce bias in hiring and promotion.
Call for broader integration measures
The study emphasizes that fixing immigrant native pay gaps requires long-term integration efforts. 'Although equal pay laws remain important, their scope to reduce immigrant–native pay gaps is limited,' the researchers conclude. 'Policies must prioritize reducing segregation between jobs to close the earnings gap effectively.'
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