Cultural differences and immigrants’ wages

Integration of immigrants into their host society is at the core public debate in most OECD countries. Immigrant integration includes two distinct dimensions: cultural and economic integration. This paper investigates interplay between these processes presents three main results. First, it documents that from more culturally distant countries earn lower wages when they enter German labor market. Second, highlights wage differences progressively diminish over years spent Germany even disappear some cases. For instance, gap associated with a one standard deviation difference religious genetic distance disappears after 15 to 20 years. Finally, provides evidence who experience greater increase assimilation growth as well. Taken together, results suggest process can benefit immigrants.