%0 Report
        %A Pineda-Hernández, Kevin
%A Rycx, François
%A Volral, Mélanie
        %T Immigrant-Native Wage Gaps and Rent Sharing: A Segmented Assimilation Story?
        %D 2026
        %8 2026 Sep
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 18981
        %U https://www.iza.org/publications/dp18981
        %X 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.
        %K rent sharing
%K natives
%K first- and second-generation immigrants
%K matched employer-employee data
%K wage decompositions
%K instrumental variables