Wage differentials between native and immigrant women in Spain
Catia Nicodemo, Raul Ramos, (2012) «Wage differentials between native and immigrant women in Spain: Accounting for differences in support», International Journal of Manpower, Vol. 33 Iss: 1, pp.118 – 136.
The purpose of this paper is to quantify the wage gap between native and immigrant women in Spain, taking into account differences in their characteristics and the need to control for common support. If immigrant women are segregated in occupations with few native women, it is important to take this into account to analyse wage differentials between both collectives.
With this aim, we use microdata from the Continuous Sample of Working Histories (Muestra Continua de Vidas Laborales) on wages and other personal characteristics such as gender, country of origin, and age in order to analyse wage differential between native and immigrant women. In particular, we apply a matching procedure and decomposition of the wage gap along the lines of Ñopo (2008). The advantage of this procedure is that one can simultaneously estimate the common support and the mean counterfactual wage for individuals on the common support (i.e. comparing native and immigrant women with similar observable characteristics). In addition, differences not only at the mean but also along the entire wage distribution can be described.
Studying the case of Spain in this context is particularly interesting because it is a country with abundant and recent immigration. In particular, immigrant women account for more than half of the total immigrants in Spain, and unlike other host countries, they come from a highly varied range of countries, with origins as diverse as Latin America, the Maghreb and Eastern Europe. To our knowledge, no other study has explicitly focused on the analysis of the wage differential of immigrant women in the Spanish labour market by taking into account the need to control for common support. Moreover, published papers illustrating the potentiality of Ñopo’s methodology are also very scarce.
The obtained results indicate that, on average, immigrant women earn less than native women in the Spanish labour market. This wage gap is bigger for immigrant women from developing countries, but perhaps the most relevant result is that an important part of this wage gap is related to differences in common support (i.e. immigrant women are segregated in certain jobs with low wages different from those occupied by native women). If the need to control for common support had been neglected, estimates of the wage gap would have been biased. After taking this into account, our results showed that immigrant women earn less than natives, and this wage gap is related to the unexplained wage component and to differences in common support. In particular, most of the characteristics that native women have and immigrants do not have are better rewarded in the labour market. From a policy perspective, these results provide support to more flexible interventions that should consider the individual heterogeneity in certain characteristics in order to improve the labour market integration of immigrants.
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