SOCIETY

Immigrants earn less and have limited access to high-paying jobs

On average, an immigrant in Denmark earns 9.2% less than an ethnic Dane. In other parts of Europe and North America, the gap is even wider. This is demonstrated by a new, comprehensive study published in Nature. Among the researchers is Associate Professor Lasse Folke Henriksen from Copenhagen Business School.

By CBS Executive Education

Immigrants in Europe and North America do not receive the same pay as native-born individuals – even when performing the same job. This is documented in a major new study published in the prestigious journal Nature.

The study analyses data from 13.5 million employees and employers across nine countries: Canada, Denmark, France, Germany, the Netherlands, Norway, Spain, Sweden, and the United States. It shows that the majority of the pay gap can be explained by immigrants being concentrated in low-wage sectors and companies. The remaining difference – approximately 4.6% – is due to lower wages for the same work.

“Immigrants face significantly greater barriers to entering high-paying sectors and firms. This is the primary cause of the wage gap,” says CBS Associate Professor and study co-author Lasse Folke Henriksen.

Largest pay gaps among Sub-Saharan African immigrants

The study reveals that inequality varies substantially depending on the region of origin. Immigrants from Sub-Saharan Africa experience the largest wage gap at 26.1%, while those from Europe, North America, and other Western countries face a smaller gap of 9%.

There are also differences between individual countries. In Denmark, the wage gap stands at 9.2%, which is relatively low compared to, for instance, Canada and Spain, where the disparity is significantly greater (see table below).

In the six countries for which data on second-generation immigrants was available – including Denmark – the study examined whether wage patterns persist across generations. The results show that the difference decreases to an average of 5.7%, but remains particularly significant for descendants of immigrants from Africa and the Middle East.

“We have a welfare society built on the ideal of equal opportunity. But our study clearly shows that structural barriers prevent immigrants – and their children – from accessing large parts of the labour market."

Lasse Folke Henriksen - CBS Associate Professor in Organisations, Markets and Governance (OMG)

Call for new policy measures

According to Lasse Folke Henriksen, it is crucial to understand the mechanisms behind the large wage differences between individuals of Danish origin and immigrants.

He emphasises that although employment among immigrants and their descendants in Denmark is high and rising, and the wage gap relatively modest compared to countries like Spain and Canada, significant barriers still exist. These barriers limit access to the highest-paid positions, which are largely held by individuals with a Danish background.

“We have a welfare society built on the ideal of equal opportunity. But our study clearly shows that structural barriers prevent immigrants – and their children – from accessing large parts of the labour market.”

According to Henriksen, future integration policies should focus on removing these barriers. This can be achieved through upskilling, language training, support in job searching, recognition of foreign qualifications, and action against discrimination in recruitment and promotion.

The study therefore provides important new insights for the equal pay debate, both in Denmark and internationally. None of the nine countries studied could demonstrate full pay parity between immigrants and the majority population – even when the work performed was identical.

First-generation immigrants

Wage disparities vary widely by country. Spain (29.9%) and Canada (27.5%) show the largest pay gaps. Norway (20.3%), Germany (19.6%), France (18.9%), and the Netherlands (15.4%) are in the middle range. The smallest differences are found in the USA (10.6%), Denmark (9.2%), and Sweden (7.0%).

Across the nine countries, immigrants earn on average 17.9% less than native-born individuals.
Around three-quarters of this difference is due to immigrants being concentrated in low-wage sectors and firms. The remaining quarter (4.6%) is due to lower pay for the same work.

When broken down by region of origin, the average wage differences are: Sub-Saharan Africa (26.1%), the Middle East and North Africa (23.7%), Asia (20.1%), Latin America (18.5%), and Europe, North America, and other Western countries (9.0%).

Second-generation immigrants

The wage gap is reduced to an average of 5.7%. Country breakdown: Norway (8.7%), Germany (7.7%), the Netherlands (5.5%), Sweden (5.3%), Denmark (5.2%), and Canada (1.9%). Approximately 80% of this difference is due to concentration in low-wage jobs. The difference for identical work is 1.1%.

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Immigrants earn less and have limited access to high-paying jobs

“We have a welfare society built on the ideal of equal opportunity. But our study clearly shows that structural barriers prevent immigrants – and their children – from accessing large parts of the labour market."

First-generation immigrants

Second-generation immigrants

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