Zum Hauptinhalt springen

Labour: Review of Labour Economics and Industrial Relations

Task Specialization and the Native-Foreign Wage Gap

This study documents that worker-level variation in tasks has played a key role in the widening of the German Native-Foreign Wage Gap. I find idiosyncratic differences account for up to 34 per cent of the wage gap. Importantly, natives specialize in high-paying interactive activities not only between, but also within occupations. In contrast, foreign workers specialize in low-paying manual activities. This enhanced degree of task specialization accounts for 11 per cent of the gap among high-wage earners and 25 per cent among low-wage earners,thus offering new insight into sources for imperfect substitution of native and foreign workers and consequently small migration-induced wage effects.

Storm, E. (2022), Task Specialization and the Native-Foreign Wage Gap. Labour: Review of Labour Economics and Industrial Relations, 36, 167-195

DOI: 10.1111/labr.12220