As many nations grapple with ageing populations, falling birthrates, labour shortages and financial pressures, the power to efficiently combine immigrants is turning into an more and more urgent matter.
Nonetheless, our new examine discovered that salaries of immigrants in Europe and North America are almost 18% decrease than these of natives, as foreign-born staff battle to entry higher-paying jobs. To achieve this conclusion, we analysed the salaries of 13.5 million folks in 9 immigrant-receiving nations: Canada, Denmark, France, Germany, the Netherlands, Norway, Spain, Sweden and the USA. Knowledge was taken from the interval of 2016 to 2019.
Immigrants in these nations earned much less primarily as a result of they have been unable to entry higher-paying jobs. Three-quarters of the migrant pay hole was the results of an absence of entry to well-paid jobs, whereas solely one-quarter of the hole was attributed to pay variations between migrant and native-born staff in the identical job.
Spain has the most important hole, whereas Sweden’s is the smallest.
Writer’s personal elaboration
The high-income nations we examined in Europe and North America all face comparable demographic challenges, with low fertility charges leading to an ageing inhabitants and labour shortages. Professional-natalist insurance policies are unlikely to alter this demographic future, however sound immigration insurance policies might help.
Throughout these nations with vastly completely different labour market establishments and immigrant populations, a typical theme emerged: nations do not make good use of immigrants’ human capital.
Stark regional variations
We discovered that immigrants earn 17.9% lower than natives on common, though the pay hole various broadly by nation. In Spain, a comparatively current large-scale receiver of immigrants, the pay hole was over 29%. In Sweden – a rustic the place many employed immigrants discover work within the public sector – it was simply 7%. These outcomes don’t embody immigrants who’re unemployed or within the casual financial system.
The place immigrants have been born additionally mattered. The very best common total pay gaps have been for immigrants from sub-Saharan Africa (26.1%) and the Center East and North Africa (23.7%). For immigrants from Europe, North America and different Western nations, the distinction in common pay in comparison with natives was a way more modest 9%.
Migrant pay gaps in line with area of origin. The minus signal (−) earlier than figures signifies that immigrants earn lower than natives. Observe that knowledge for second-generation immigrants is unavailable in France, Spain and the US.
Writer’s personal elaboration
Our outcomes counsel that the kids of immigrants confronted considerably higher incomes prospects than their mother and father. For the nations the place second-generation knowledge was obtainable – Canada, Denmark, Germany, Netherlands, Norway and Sweden – the hole narrowed over time, and the kids of immigrants had a considerably smaller earnings hole, incomes a median of 5.7% lower than staff with native-born mother and father.
The battle to entry higher-paying jobs
Past quantifying the hole, we wished to know the roots of pay disparities. To create higher insurance policies, it is very important know whether or not immigrants are paid lower than natives after they’re doing the identical job in the identical firm, or whether or not these variations come up as a result of immigrants usually work in lower-paying jobs.
By a large margin, we discovered that immigrants find yourself working in lower-paying industries, occupations and firms; three-quarters of the hole was resulting from this sort of labour-market sorting. The pay hole for a similar work in the identical firm was simply 4.6% on common throughout the 9 nations.
These variations signify a failure of immigration coverage to include immigrants, as immigrants are relegated to jobs the place they can not contribute to their full potential. Our analyses rule out that the dearth of entry to higher-paying jobs merely displays a distinction in ability between immigrants and native-born staff. We additionally discovered that the scale of the pay hole and the important thing function of unequal entry to well-paid jobs is analogous for immigrants with and and not using a college training.
Because of this the immigrant-native pay hole largely represents a market inefficiency and coverage failure, with important social penalties for each immigrants and immigrant-receiving nations.
Coverage implications
Though equal pay for equal work insurance policies could seem to be a viable resolution, they gained’t shut the immigrant pay hole. It’s because they solely assist those that have already secured work, however immigrants face limitations to employment that start lengthy earlier than even making use of for a job. This contains convoluted processes to validate college levels or different {qualifications}, and exclusion from skilled networks.
The coverage focus ought to due to this fact be on bettering entry to raised jobs.
To make this occur, governments ought to put money into programmes corresponding to language coaching, training and vocational expertise for immigrants. They need to guarantee immigrants have early entry to employment info, networks, job-search help and employer referrals. They need to implement standardised and clear recognition of overseas levels and credentials, serving to immigrants to entry jobs matching their expertise and coaching.
That is notably vital for Europe because it races to draw – and retain – expert immigrants who could also be having second ideas in regards to the US within the Trump period. Within the European Union, round 40% of university-educated non-EU immigrants are employed in jobs that don’t require a level, an underutilisation of expertise referred to as mind waste.
Some nations are already taking steps to treatment this. Germany’s Expert Immigration Act – which took impact in 2024 – permits overseas graduates to work whereas their levels are being formally recognised. In 2025, France reformed its Passeport Expertise allow to draw expert professionals and handle labour shortages, particularly in healthcare.
These sorts of insurance policies assist make sure that foreign-born staff can contribute at their full capability, and that nations can reap the total advantages of immigration by way of productiveness positive aspects, increased tax income and decreased inequality.
If immigrants can’t get entry to good jobs, their expertise are underutilised and society loses out. Good immigration coverage doesn’t finish on the border – it begins there.
