Reference : Cultural differences and immigrants' wages
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Business & economic sciences : Special economic topics (health, labor, transportation…)
Migration and Inclusive Societies
Cultural differences and immigrants' wages
Raux, Morgan mailto [University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Department of Economics and Management (DEM) >]
Discussion Paper 2021-02
[en] Cultural distance ; Immigrant Workers
[en] In this paper, I investigate how cultural differences affect the labor-market performance of immigrant workers in Germany. I document a negative relationship between hourly wages and the cultural distance between immigrants' countries of origin and Germany. This result is robust across the three main indicators used in the gravity literature: linguistic, religious, and genetic distances. This cultural wage penalty disappears after five to ten years spent in Germany. Controlling for language proficiency as well as for selective in- and out-migration, these results highlight the cultural integration of immigrant workers. I finally provide evidence suggesting that lower wage progression may be explained by fewer job-to-job transitions.

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