People with ethnic minority background still earning significantly less than Dutch

The income gap between Dutch people with an immigrant background and so-called "native" Dutch is not decreasing significantly, central planning office CPB said in a report on Wednesday. The planning office partly attributes the wage gap to differences in education level, differences in types of jobs, and discrimination on the labor market.

Fighting racial discrimination on the labor market is one of the necessary steps to eliminate the income disparities, the CPB said pointing to another primary factor in wage gap in the Netherlands. Other factors that play a role in the income gap include choice of study direction, social networks, job type, cultural differences, and proficiency in the Dutch language. Reducing the difference between flexible and permanent contracts on the labor market can also help, as people with a migration background less often move from flexible to permanent employment.

The planning office also recommends making adjustments in the field of education and the labor market. International research shows that more focus on early- and pre-school education can help in future job prospects. Policies should be implemented to prevent early school dropouts. People with a migration background should receive more guidance when choosing what to study or finding internship, specifically paying attention to labor market perspectives.

The income difference between people with a Surinamese background and people without an ethnic minority background is 16 percent. People with Antillean, Turkish and Moroccan backgrounds respectively earn 21 percent, 26 percent, and 31 percent less than Dutch with no migration background. Though CPB notes that a slight improvement can be seen in the last two groups between 2002 and 2017.

People with a Moroccan, Turkish, Surinamese or Antillean immigrant backgrounds have around 25 percent less disposable income than Dutch people with no migration background. This has remained relatively stable over the past 15 years, according to the CPB.

The proportion of working men among Dutch with a migration background is 10 to 20 percent lower than among Dutch men with no migration background. Among women, the difference is even 15 to 35 percent. The hourly wages for people with a migration background are also considerably lower. The hourly wage of men and women with an Antillean background is around 4 percent lower. For women with a Turkish background, the hourly wage is even 29 percent lower.

A child of parents with a Moroccan background in the lowest income class on average will reach the 28th step in the income distribution, while the child of Dutch parents from the same income group will on average reach 13 steps higher. The CPB used a scale of 1 to 100, with 1 being the lowest and 100 the highest income step. Also if parents with a migration background fall in a higher income group, their children's income lags behind that of their Dutch peers.

The share of highly educated Dutch with an ethnic minority background is growing, but so is the share of highly educated Dutch with no migration background. "For the time being, the difference in level of education between people with and without a migration background is not diminishing. The difference in labor income due to a difference in level of education will therefore continue to exist", the planning office said.