Immigrants to Europe and North America earn almost 18 per cent less than native citizens, with three-quarters of the gap caused by limited access to higher-paying jobs rather than unequal pay for the same work, according to new research.
The study from Frankfurt School of Finance & Management, published in Nature, analyzed employer-employee data from 13.5 million individuals across nine countries including Canada, the United States, and seven European nations.
Access to better jobs drives most of pay gap
The research found an overall immigrant-native pay gap of 17.9 per cent, according to Professor Halil Sabanci and colleagues. Three-quarters of this difference stems from immigrants being more likely to work in lower-paying industries, occupations and companies rather than receiving unequal compensation for identical roles.
“These findings shed new light on persistent pay disparities – and have direct policy implications. While enforcing equal pay for equal work matters, the bigger challenge lies in opening access to higher-paying jobs,” said Sabanci.
Canada shows one of largest gaps
Pay gaps varied significantly among the countries studied. Canada recorded the second-largest gap at 27.5 per cent, behind only Spain at 29.9 per cent, the study found.
Mid-level differences appeared in Norway at 20.3 per cent, Germany at 19.6 per cent, France at 18.9 per cent, and Netherlands at 15.4 per cent. The smallest gaps relative to native workers were found in the United States at 10.6 per cent, Denmark at 9.2 per cent and Sweden at 7.0 per cent.
Second generation sees improvement but gap persists
For six countries including Canada, researchers examined earnings patterns among children of immigrants. The pay gap dropped substantially from 17.9 per cent to 5.7 per cent for second-generation workers but still persists, particularly for children of immigrants from Africa and the Middle East, according to the study.
When comparing workers in identical jobs at the same employer, the second-generation gap fell further to around 1.1 per cent, indicating much greater pay equality.
Policy focus should shift to job access
The researchers suggest policies should focus on improving immigrant access to higher-paying roles through language training, skill development, job search assistance, domestic education, foreign credential recognition, and better access to job-relevant information and networks.
The study analyzed data from Canada, Denmark, France, Germany, Netherlands, Norway, Spain, Sweden and the United States.
