Sources of Wage Differentials Between Native and Immigrant Workers: A Regional Analysis

Sources of wage differential between native and all immigrant, Asian, European, and Latin American workers are examined by estimating hedonic wage equations and employing wage differential decomposition methodology. In addition the extent of interregional differences in such differential is investigated. Results show that a large portion of the wage differential is due to the level and valuation of pre- and post-migration experiences and education. However, some portion of wage differential is due to wage discrimination (residual difference). These findings are by no means uniform for all ethnic groups or for all regions of the United States. The portion of wage differential attributable to possible discrimination is highest for Latin American and nonexistent for Europeans. Overall, the estimated levels of wage discrimination against immigrants are lower, and the regional pattern of these estimates is consistent with the findings of wage discrimination studies of blacks and women.