Unionization, licensure and workplace variation in pay inequality between immigrants and natives

Abstract

Organizational research has revealed considerable variation in immigrant–native pay inequalities across workplace contexts. However, less is known about how broader labor market institutions intersect in the local dynamics of wage setting between employees of immigrant and native backgrounds. We argue that union density and higher shares of employees in licensed occupations in workplaces constrain organizational opportunity structures for unequal pay according to immigrant backgrounds. Our analysis of longitudinal linked employer–employee administrative data for the Norwegian labor market shows that the wage gap between immigrants and natives decreases with increasing workplace unionization, but almost exclusively for immigrants who are union members. Next, licensure raises pay at the individual and workplace levels, although any reduction in immigrant–native pay gaps is contingent on immigrants’ access to licensed jobs. Our findings support the claim that institutional regulation in the workplace reduces the organizational scope of unequal pay based on immigrant status.