The study, led by Professor Halil Sabanci of the Frankfurt School of Finance & Management, examined employer-employee data from 13.5 million people in Canada, Denmark, France, Germany, the Netherlands, Norway, Spain, Sweden and the United States. It found an overall immigrant-native pay gap of 17.9 per cent, with three-quarters of that difference down to immigrants being more likely to work in lower-paying industries, occupations and companies. Only a quarter of the gap was the result of unequal pay for the same work.
The scale of the disparity varied widely between countries. Spain had the largest pay gap at 29.9 per cent, followed by Canada at 27.5 per cent. Norway (20.3 per cent), Germany (19.6 per cent) and France (18.9 per cent) also recorded significant differences, while the Netherlands (15.4 per cent) and the United States (10.6 per cent) fared better. Denmark (9.2 per cent) and Sweden (7.0 per cent) had the smallest gaps.
Researchers also tracked outcomes for the children of immigrants in six of the countries – Canada, Denmark, Germany, the Netherlands, Norway and Sweden. They found that the pay gap narrows sharply for the second generation, falling from 17.9 per cent to 5.7 per cent. However, the disparity persisted, particularly for those with African or Middle Eastern backgrounds. When comparing second-generation immigrants and natives doing the same job for the same employer, the gap fell further to around 1.1 per cent.
“These findings shed new light on persistent pay disparities and have direct policy implications,” said Professor Sabanci. “While enforcing equal pay for equal work matters, the bigger challenge lies in opening access to higher-paying jobs. Addressing hiring bias and improving job-matching programmes may go much further.”
The researchers argue that tackling structural barriers is key. They highlight the need for policies to improve access to better-paid roles through language training, skills development, job search assistance, domestic education, foreign credential recognition and better access to professional networks.
Such measures, they say, could be more effective at closing the earnings gap than equal pay enforcement alone, by helping immigrants secure positions in sectors and companies where wages are higher.
Amy Ingham
Amy Ingham is a reporter at Business Matters, covering UK business news with a focus on breaking news, business policy, late payments and insolvency. She joined the magazine in 2026 after completing the NCTJ Diploma in Journalism at Harlow College's journalism school. Her recent reporting includes British Steel's nationalisation and its impact on SME suppliers, the decline in late payments by large firms, and Insolvency Service director disqualifications. Reach her at aingham@cbmeg.co.uk.
