From guests to hosts: immigrant‐native wage differentials in Spain

Abstract

PurposeThe purpose of this paper is to analyse immigrant‐native wage differentials in Spain.Design/methodology/approachThe paper exploits the Earnings Structure Survey 2006, which is the first nationally representative sample of both foreign and Spanish employees. Using the Machado‐Mata econometric procedure, wage differentials between locals and foreigners are decomposed into the gap related to characteristics and the one due to different returns on endowments (i.e. discrimination).FindingsThe paper finds that, in absolute terms, the latter component grows across the wage distribution, reflecting the existence of a kind of glass ceiling, consistent with the evidence of over‐education found in previous research.Originality/valueThe paper for the first time explores earnings differentials between immigrant and Spanish workers using a nationally representative database. In addition, standard errors are computed in order to determine if the gaps are statistically significant, a task not addressed by previous works. Finally, the work is relevant as Spain has become a host country only a few years ago.