Portugal, PedroGomes, João Pedro Bonito2025-03-282025-03-282025-01-092025-01-09http://hdl.handle.net/10362/181614In this study, we analyze the impact of immigrant and native peers’ ability on immigrant and native workers’ wages, using rich matched employer-employee data on the Portuguese la bor market. We employ an estimation strategy that circumvents problems of endogeneity and show that, when both worker and peer are natives or immigrants, a one standard deviation in crease in the average quality of peers increases wages by 2.21% or 1.18%, respectively. We also find that these peer effects account for 4.47% of the immigrant wage gap, while the es tablishment/occupation/year component explains 52.30%, and the worker component explains 43.23% of the wage differential.engImmigrantsWage GapLabor market sortingPeer efectsGelbach decompositionMatched employer-employee dataHigh-dimensional fixed effects modelmaster thesis203925203