Skill Transferability and Immigrant-Native Wage Gaps

In this paper, I examine wage developments among Eastern European immigrants versus UK natives between 1998 and 2008 by measuring the extent to which intergroup wage differentials are explainable by these groups' changing attributes or by differences in returns to these characteristics. Specifically, by applying unconditional quantile regression to immigrant-native wage gaps before and after the 2004 EU enlargement to Eastern countries, I show that a major part of the decrease in the average wages of Eastern European migrants in the UK results from a large decrease in wage levels at the top of the distribution. At all distribution points, major role is played by occupational downgrading, which increases over time. The results further suggest that the decreased wage levels at the top of the distribution stem mainly from low transferability of skills acquired in the source country