From guests to hosts: immigrant-native wage differentials in Spain

Purpose - The purpose of this paper is to analyse immigrant-native wage differentials in Spain. Design/methodology/approach - The paper exploits the Earnings Structure Survey 2006, which is the first nationally representative sample of both foreign and Spanish employees. Using the Machado-Mata econometric procedure, wage differentials between locals and foreigners are decomposed into the gap related to characteristics and the one due to different returns on endowments (i.e. discrimination). Findings - The paper finds that, in absolute terms, the latter component grows across the wage distribution, reflecting the existence of a kind of glass ceiling, consistent with the evidence of over-education found in previous research. Originality/value - The paper for the first time explores earnings differentials between immigrant and Spanish workers using a nationally representative database. In addition, standard errors are computed in order to determine if the gaps are statistically significant, a task not addressed by previous works. Finally, the work is relevant as Spain has become a host country only a few years ago.