Refugee immigrants, occupational sorting and wage gaps

Abstract

This paper analyzes wage income differences between native born workers and refugee immigrants in Sweden within occupations delineated in accordance with the augmented canonical model of occupational assignment. The identification strategy is based on a control group of matched native born persons with similar characteristics as the refugees and by using panel data methods capturing unobserved heterogeneity. The econometric results from a Swedish employer-employee panel data set document a narrowed wage gap over time, showing that the remaining difference can be explained to a large extent by the sorting into different types of occupations. Based on an Blinder–Oaxaca decomposition, we find a persistent wage gap in cognitive non-routine occupations but also, surprisingly, task categories where refugees have higher earning than natives.