A new GLO Discussion Paper using unique Swedish employer-employee data shows that the observed wage gap between established refugees and comparable natives is mainly caused by occupational sorting into cognitive and manual tasks. Within occupations, it can be largely explained by differences in work experience.
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GLO Discussion Paper No. 562, 2020
Occupational Sorting and Wage Gaps of Refugees – Download PDF
by Baum, Christopher F. & Lööf, Hans & Stephan, Andreas & Zimmermann, Klaus F.
GLO Fellows Christopher F. Baum, Hans Lööf & GLO President Klaus F. Zimmermann
Hans Lööf 
Featured image: Photo by James Beheshti on Unsplash
Author Abstract: Refugee workers start low and adjust slowly to the wages of comparable natives. The innovative approach in this study using unique Swedish employer – employee data shows that the observed wage gap between established refugees and comparable natives is mainly caused by occupational sorting into cognitive and manual tasks. Within occupations, it can be largely explained by differences in work experience. The identification strategy relies on a control group of matched natives with the same characteristics as the refugees, using panel data for 2003–2013 to capture unobserved heterogeneity.
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