The Role of Firms and Job Mobility in the Assimilation of Immigrants: Former Soviet Union Jews in Israel 1990–2019

Abstract We study how job mobility, firms, and firm-ladder climbing can shape immigrants’ labor market success. Our context is the mass migration of former Soviet Union Jews to Israel during the 1990s. Once in Israel, these immigrants faced none of the legal barriers that are typically posed by migration regulations around the world, offering a unique backdrop to study undistorted immigrants’ job mobility and resulting unconstrained assimilation. Rich administrative data allows us to follow immigrants for up to three decades after arrival. Immigrants experienced large initial wage gaps relative to natives—57% for men and 47% for women—and 12%–20% of these gaps are explained by differential sorting across firms and differential pay-setting within firms. The wage gap closes only after 27–29 years, and much of this convergence is driven by immigrants’ differential climbing of the firm ladder: immigrants are more mobile and experience faster upward moves, even in the long term. As such, firm-to-firm mobility is a key driver of these immigrants’ long-run prosperity. Lastly, we quantify a previously undocumented job utility gap when accounting for non-wage amenities. Upon arrival, immigrants’ non-pay amenities were lower by 0.38 (men) and 0.94 (women) native standard deviations. As such, amenities exacerbate immigrant–native disparities based on pay alone.