Immigrant–Native Wage Inequality across Occupational Sectors in Australia

We investigate wage inequality by migrant status across white collar and blue collar occupations in Australia. We use the reweighting and recentered influence function regression methods proposed by Firpo, Fortin, and Lemieux (2009) to decompose wage differentials across its distribution. Migrants are observed to have a wage advantage, and this wage differential varies over the wage distribution as well as by occupation. Significant wage differentials are found above the median: positive for white collar workers and negative for blue collar workers. Overall, the wage advantage of migrants reflects their superior labour market characteristics, and in particular, their levels of education. A decomposition analysis indicates that migrants receive lower returns for their education. We explore the wage differences by country of origin and find that English language proficiency plays an important role.