New Zealanders can cross borders freely, work and live in Australia indefinitely thanks to the Trans‐Tasman Travel Agreement. This paper uses a recently developed decomposition method to decompose the weekly wage gap at various quantiles on the wage distribution between New Zealand‐born (NZ‐born) and Australian‐born workers, and between NZ‐born workers, migrants from other English speaking countries (OESC), and from non‐English speaking countries (NESC) to determine how free and regulated migration influences migrants’ performance in the Australian labour market. We found that NZ‐born workers earned higher weekly wages than both Australian‐born and NESC workers but earned lower wages than OESC migrants. Differences in endowment were primarily responsible for the wage gaps between NZ‐born and Australian‐born workers and between NZ‐born and OESC migrants. However, differences in returns to worker and job characteristics are mainly responsible for the wage gap between NZ‐born and NESC migrants.

No abstract