The Effects of Immigration Policies and Labor Market Structures on the Income of Immigrants to the More Developed Countries of Europe and North America

The average household income of first generation immigrants in Europe and North-America is lower than that of natives, and this difference can not be explained by their amount of human capital (education, age, gender, residence). This is above all true for immigrants, coming from the second- or third world, who have also a lower return of their education. These arrears in income of immigrants vary between countries of destination, also after control for the individual characteristics of immigrants and natives. Only one characteristic of immigration policy has a significant effect on the variance of income arrears of immigrants across the countries of destination: the inflow ratio of asylum seekers. The higher this inflow ratio of asylum seekers in a country of destination, the larger the income differences between comparable immigrants and natives in that country of destination. Also only one characteristic of the labour market for foreigners has a significant effect on income arrears of immigrants in various countries of destination and from different countries of origin. A larger labour market participation by foreigners increases their income arrear with comparable natives, but this larger labour market participation by decreases that income arrear of the higher educated immigrant and does that extra for the higher educated immigrant from the second and third world.