Where Do Immigrants Fare Worse? Modeling Workplace Wage Gap Variation with Longitudinal Employer-Employee Data

We propose a strategy for observing and explaining workplace variance in categorically linked inequalities. Using economy wide Swedish linked employer-employee panel data, we examine variation in workplace wage inequalities between native Swedes and non-Western immigrants. Consistent with relational inequality theory (RIT) we find that immigrant-native wage gaps vary dramatically across workplaces, even net of strong human capital controls. We also find that, net of observed and fixed effect controls for individual traits, workplace immigrant-native wage gaps decline with increased workplace immigrant employment and managerial representation and increase when job segregation rises. These results are stronger in high inequality workplaces and for white collar employees: contexts in which we expect status-based claims on organizational resources, the central causal mechanism identified by relational inequality theory, to be stronger. While Sweden displays substantial workplace rank segregation between non-western immigrants and native Swedes and patterns of statistical discrimination against non-western immigrants, both decline with increased labor force experience. Overall, workplace variation in the non-western immigrant-native wage gaps are contingent on organizational variation in the relative power of groups and the institutional context in which that power is exercised