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The wage gap of immigrants in the Portuguese labour market

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Using matched employer-employee data, we examine the wage gap upon arrival between immigrant and native workers in the Portuguese labour market in the 2002-2008 period. We use the relation between Gelbach’s and Oaxaca-Blinder’s decompositions to split the unconditional average wage gap as the sum of a composition effect and a wage structure effect. Our results show that most of the wage gap is not due to worst endowments of the immigrants compared to natives but to differences in the returns to those characteristics and to the immigrant status effect. In particular, education and foreign experience of the average immigrant are significantly less valued in the Portuguese labour market than natives’ education and experience. Total immigrants are a heterogeneous group of different nationalities, with immigrants from the EU15 and China starring as the two extreme cases.
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Journal (repec) 
Economic Bulletin