Firm evidence on ethnic stratification: work organizations, employment segregation, and immigrant economic assimilation

The distinguishing feature of this project is the organizational approach to the study of ethnic stratification in the labor market. Despite a vast literature on labor market inequalities between immigrants and natives, relatively few prior studies use data where employees are linked directly to their employers to study these issues. Thus, robust evidence about the role of firms and workplace contexts in the processes of immigrant assimilation is still limited. Yet, workplaces arguably constitute key local settings where economic rewards are allocated, social status is negotiated, and a substantial share of social interaction between adults unfolds. The project will study ethnic workplace segregation and workplace inequalities in pay and career opportunities between the ethnic majority and immigrant-origin workers. Using high-quality LEE data and state-of-the-art panel data techniques, the project will, for example, be able to pinpoint workplace contexts where immigrant-native pay inequalities, net of individual human capital differences, typically are large and those where they are small or even reversed. Are immigrant-native wage inequalities reduced in more bureaucratized workplaces where wage formation is more formalized? Are immigrant-native wage inequalities aggravated in workplaces where performance pay and bonuses are used? How does firm-level adoption of (skill-biased) technological innovations affect immigrant-origin employees at different skill levels? From a policy perspective, a better grasp of the proximate organizational mechanisms behind ethnic workplace inequalities will enable more targeted interventions and improved enforcement of equal opportunity laws. Research from the project shows substantial ethnic segregation across workplaces between immigrants and the majority population. Immigrants are overrepresented in workplaces characterized by low wages, manual labor, and a high proportion of coworkers with immigrant background. In contrast, descendants of immigrants tend to be employed in workplaces more closely resembling those of the majority population, featuring higher salary levels, a more diverse occupational composition, and relatively fewer employees with immigrant background. Ongoing research within the project has also documented reduced wage gaps for both immigrants and descendants of immigrants compared to observably similar coworkers from the majority population in workplaces where unionization rates are high. However, this primarily applies to employees with immigrant backgrounds who are themselves unionized. Additionally, the study reveals that wage disparities between workers with and without immigrant backgrounds are smaller among those in licensed professions. Nonetheless, the extent of licensure among colleagues has less significance in this context.

Large-scale immigration to the rich, liberal democracies in the West over the past several decades has put economic incorporation of disadvantaged immigrant-origin ethnic minorities high on the public agenda in the 21st century. Despite a vast literature on labor market inequalities between immigrant-origin and native populations, the great majority of these studies is based on surveys of individual workers and yield limited knowledge about the role of workplaces and firms. This project moves the field forward by addressing how employment segregation and internal organizational mechanisms within workplaces and firms shape economic assimilation both within and across immigrant generations. The novelty of my approach lies in bringing an organizational focus on local workplace contexts as key sites shaping the dynamics of ethnic stratification in contemporary labor markets, with a key focus on changes in workplace inequalities across immigrant generations. Theoretical innovation will be pursued by confronting theories of immigrant assimilation and organizational inequality with empirical studies of local workplace contexts. I will address how immigrant workplace inequalities both reflect and shape the salience of ethnic boundaries and minority-majority status distinctions. A key goal is to probe whether, how, and why ethnic inequalities (e.g., wage gaps) vary across organizational contexts, net of individual worker traits. The project exploits linked employer-employee data covering the whole economy, which enables me to study employment segregation and the organizational dynamics of immigrant economic assimilation in high detail. These world-class data allows me to situate workers in their local workplaces, enabling the study of immigrant-native inequalities in, e.g., wage setting and worker mobility using state-of-the-art methods. The main empirical focus will be on Norwegian workplaces, but the project will also draw on selected cross-national comparisons.