Occupational Downgrading and Wages of New Member States Immigrants to Ireland

Abstract

This paper explores the importance of occupational downgrading in explaining the pay gap of New Member States (NMS) immigrants to Ireland by taking advantage of two data sources, the Census and the Survey on Income and Living Conditions (SILC). The study identifies biases in the coverage of NMS immigrants in SILC that dampen their estimated earnings disadvantage. Corrections to population weights are suggested. These adjustments have a significant impact on results, increasing both the size of the wage penalty of NMS immigrants and the extent to which the pay gap can be explained by occupational downgrading. A replication of published results for the UK reveals similar patterns of penalties for NMS workers in both countries. Factors that may explain the concentration of NMS workers in low-skill/low-wage occupations are discussed.