Immigrant workers earn way less than natives in Western countries: here’s why

An international study has revealed that immigrants across Europe and North America face a significant pay gap compared to native-born workers, earning on average 17.9% less per year. The research, published in Nature, examined salary data from 13.5 million workers in nine countries between 2016 and 2019, including the United States, Canada, Germany, France, Spain, and several Nordic states.

Lack of access to high-paying jobs

The study found that the majority of this income gap—about three-quarters—stems not from unequal pay for equal work, but from immigrants being concentrated in lower-paying sectors and positions. Even when immigrants and natives held the same job at the same company, a 4.6% gap remained, suggesting factors such as weaker bargaining power, productivity differences, or discrimination, Portfolio writes.

At an industry level, the disparity was 13%, while within specific occupations it narrowed to around 8–9%. The findings indicate that immigrants tend to have limited access to high-prestige and better-paying roles, often ending up in less lucrative or less productive firms.

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Country-by-country differences

The pay gap varied considerably between countries.

• Spain and Canada recorded the largest disparities, where immigrants earned nearly 29% less than natives.
• In Germany, France, Norway, and the Netherlands, the gap ranged between 15% and 20%.
• At the other end of the scale, the difference was under 10% in the United States, Sweden, and Denmark. Sweden’s relatively smaller gap has been linked to immigrants’ strong participation in the public sector.

Where immigrants come from matters

The size of the pay gap also depended heavily on workers’ origins. Immigrants from sub-Saharan Africa faced the steepest disadvantage, earning 26% less than locals, even within the same occupation. Workers from the Middle East and North Africa also experienced significant shortfalls, averaging 23.7% less. In contrast, immigrants arriving from other Western countries saw only a 9% wage gap.

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The second generation fares better

The children of immigrants generally faced much smaller disadvantages. Second-generation workers earned 5.7% less than natives overall, and when doing the same job, the gap dropped to just over 1%. The findings suggest that while integration improves over generations, structural barriers remain.

Overqualification and wasted talent

A related challenge is that many immigrants are overqualified for the jobs they hold. According to Eurostat, nearly 40% of non-EU citizens in the EU were working in positions below their skill level in 2023. This represents a major loss of potential, both for individuals and for host economies facing looming skills shortages.

Policies to close the gap

Experts argue that targeted policies could significantly reduce wage inequality. Suggested measures include language and job training, recognition of foreign qualifications, and job placement programs that directly connect migrants with employers.

Several countries have recently introduced reforms:

• In 2024, Germany’s Skilled Immigration Act allowed foreign graduates to work while awaiting degree recognition.
• France reformed its “Carte Talent” permit to attract skilled professionals, especially in healthcare.

Researchers stress that such policies benefit not only immigrants but also host countries by increasing productivity, boosting tax revenues, and easing inequality. As they put it: “Smart immigration policy doesn’t end at the border – it starts there.”

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