First and second generation immigrant earnings in Germany: A relational inequality approach

We conceptualize immigrant incorporation as a categorically driven process, contrasting the bright distinctions between first generation immigrants and natives, with more blurry second generation contrasts. Analyzing linked employer-employee data for a large sample of employees in 100 German large organizations, we explore generational, labor market and workplace contexts that expand or mitigate native-immigrant inequalities. We find a substantial average first generation (1G) immigrant-native wage gap, which is not explained by individual human capital differences or most aspects of organizational context. In contrast, there is on average no second generation (2G) wage gap, but substantial variation across workplaces. 2G immigrants do better in workplaces where they have intersectional advantages over natives and in upper-tier jobs. In uncredentialed jobs 2G immigrants look like 1G immigrants, especially when they are employed in high class inequality or low collective bargaining workplaces.