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Immigrants in U.S. Earn 10.6% Less Than Native-Born Workers, But Biggest Driver is Job Access, Not Wage Discrimination
Immigrants in the United States earn 10.6% less than similarly educated U.S.-born workers, largely because they are concentrated in lower-paying industries, occupations and companies, according to a major new study published July 16 in Nature, co-authored by a University of Massachusetts Amherst sociologist who studies equal opportunity in employment. The research—one of the most comprehensive global comparisons of immigrant labor market integration to date—analyzes linked employer-employee data from over 13 million people across nine advanced economies in Europe and North America. The U.S. results, drawn from a unique combination of Census Bureau, earnings and employer data, reveal that only about one-quarter of the wage gap is due to pay inequality within the same job and company. Instead, the majority stems from structural barriers that limit immigrants’ access to better-paying workplaces. “These findings are important because they show that most of the immigrant wage gap isn’t about being paid less for the same work—it’s about not getting into the highest-paying jobs and firms in the first place,” says Donald Tomaskovic-Devey, professor of sociology and founding director of the Center for Employment Equity at UMass Amherst Key U.S. Findings First-generation immigrants with legal status in the U.S. earn 10.6% less than comparable native-born workers. 3.4%, a third of that gap, is attributable to unequal pay for the same job at the same employer. No data was available on second-generation immigrants in the U.S., but other countries showed persistent but smaller gaps into the next generation. The study suggests that efforts to close immigrant wage gaps should focus on increasing immigrants’ access to better jobs and firms. Promising approaches include: Language and skills training Recognition of foreign credentials Access to professional networks Employer anti-bias interventions “Improving job access is essential,” says co-author Andrew Penner, professor of sociology at the University of California, Irvine. “This means addressing the barriers that keep immigrants out of the highest-paying firms and occupations.” As of 2023, immigrants constituted approximately 14% of the U.S. population, totaling over 47 million people. There are approximately 1 million new long-term permanent residents annually. U.S. immigration policy encompasses diverse pathways, including family-based migration, employment-based visas, the Diversity Visa Lottery and humanitarian protection. Immigration has been a defining feature of the U.S. population since its founding, with distinct waves shaped by economic needs, political developments and global conflicts. “For almost 250 years, we have been a nation of immigrants, and this pay gap indicates that we can do more as a country to help people following the paths of our forebears realize the American dream,” Tomaskovic-Devey adds. Global Comparison The study includes 13.5 million individuals in nine immigrant-receiving countries: the U.S., Canada, France, Germany, Denmark, Netherlands, Norway, Spain and Sweden. The U.S. had one of the smallest pay gaps (10.6%) among the nine countries studied. By contrast, Canada showed a 27.5% gap and Spain a 29.3% gap. The most favorable outcomes for immigrants were in Sweden (7% gap) and Denmark (9.2%). The authors identify two main sources of the immigrant-native pay gap: Sorting—Immigrants are more likely to work in lower-paying industries, occupations and firms. Within-job inequality—In all countries immigrants are paid less than natives doing the same job for the same employer, but these gaps are relatively small. Across the nine countries, three-quarters of the 17.9% average wage gap for immigrants was due to sorting; just one-quarter stemmed from unequal pay within jobs. In the U.S., this pattern was consistent: structural job access—not wage discrimination—was the dominant force. The study also exposes persistent disadvantages for immigrants from certain world regions, including Sub-Saharan Africa, Latin America and the Middle East. Across all countries, immigrants from these regions faced larger wage gaps than immigrants from Western or Asian countries. The international research is the latest in a series of high-profile publications from a team spanning over a dozen countries in North America and Europe that has been investigating the dynamics of workplace earnings distributions for the last decade.
