Working Paper: CEPR ID: DP14917
Authors: Christopher F. Baum; Hans L.F. Andreas Stephan; Klaus F. Zimmermann
Abstract: Refugee workers start low and adjust slowly to the wages of comparable natives. The innovative approach in this study using unique Swedish employer-employee data shows that the observed wage gap between established refugees and comparable natives is mainly caused by occupational sorting into cognitive and manual tasks. Within occupations, it can be largely explained by differences in work experience. The identification strategy relies on a control group of matched natives with the same characteristics as the refugees, using panel data for 2003-2013 to capture unobserved heterogeneity.
Keywords: refugees; wage earnings gap; Blinder-Oaxaca decomposition; employer-employee data; coarsened exact matching; correlated random effects model
JEL Codes: C23; F22; J24; J6; O15
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| cognitive nonroutine tasks (D91) | wage earnings (J31) |
| manual nonroutine tasks (L23) | wage earnings (J31) |
| early occupational sorting (L26) | future transitions (J62) |
| labor market experience (J29) | wage outcomes (J31) |
| refugee background (F22) | wage earnings (J31) |
| occupational sorting (J29) | wage gap (J31) |
| work experience (M53) | wage differential (J31) |