@TechReport{iza:izadps:dp18981,
            	author={Pineda-Hernández, Kevin and Rycx, François and Volral, Mélanie},
            	title={Immigrant-Native Wage Gaps and Rent Sharing: A Segmented Assimilation Story?},
            	year={2026},
	month={Sep},
            	institution={Institute of Labor Economics (IZA)},
            	address={Bonn},
            	type={IZA Discussion Paper},
            	number={18981},
            	url={https://www.iza.org/publications/dp18981},
	abstract={Although an increasing body of literature has examined the relationship between firms’ profitability and wage inequality in the context of a diverse workforce, the role of rent sharing in explaining origin-based wage differentials has yet to be explored. Our paper aims to fill this gap using detailed Belgian matched employer-employee data from 1999 to 2016. After controlling for a wide range of covariates and addressing endogeneity issues, our estimates show that the wage-profit elasticity equals approximately 3% and does not differ statistically between native and immigrant workers, be they first or second generation. However, Oaxaca-Blinder decompositions suggest that rent sharing has a significant influence on immigrants’ wages through labour market segregation. Specifically, first-generation immigrants are found to earn lower wages than natives because of their higher concentration in firms with lower profit margins. The same is true for second-generation immigrants, but almost half as much. These findings, corroborated and refined by heterogeneity tests according to gender, educational attainment and level of collective bargaining, support the hypothesis of a segmented assimilation process for immigrants.},
	keywords={rent sharing;natives;first- and second-generation immigrants;matched employer-employee data;wage decompositions;instrumental variables},
            }