Immigration and the cost of ethnic subordination: the case of Israeli society

This study focuses on earnings disadvantages experienced by three ethnic groups of Jewish immigrants in Israel. Data were obtained from the 2011 Income Survey gathered by the Israel Central Bureau of Statistics. The findings reveal that when compared to Israeli-born, all ethnic groups are disadvantaged in earnings attainment in the first generation. The earnings disadvantages of immigrants as compared to Israeli-born decrease with the passage of time and become negligible in the second generation. To disentangle the impact on earnings penalty of ethnic origin from that of immigrant status, a procedure for decomposing mean differences between groups is introduced. The analysis reveals that earnings disadvantage among Ashkenazim and Soviet immigrants can be attributed to immigrant status but not to ethnicity. By contrast, earnings penalties among Sephardim immigrants can be attributed to both ethnicity and immigrant status. The implications of the long-lasting effect of ethnicity versus the short-term effect of immigrant status are discussed.