Do better pre-migration skills accelerate immigrants' wage assimilation?

•Using administrative data we analyze wage assimilation of ethnic German immigrants.•Our data comprise an estimate of immigrants’ expected entry wage in Germany.•Both entry wages and subsequent wage assimilation increase in the wage potential.•In line with complementarities between pre-migration and country-specific skills.•Our findings are consistent with a U-shaped pattern of migrants’ job mobility.

This paper analyzes wage assimilation of ethnic German immigrants to Germany using unique administrative data that include an administrative estimate of immigrants' expected wage in Germany at the time of migration. We find that a 10% higher wage potential translates into a 1.6% higher wage in Germany when also controlling for educational attainment, thus pointing at partial transferability of pre-migration skills to the host country's labor market. We also document that wage assimilation is significantly accelerated for immigrants with higher wage potentials. Our results are both in line with complementarities between pre-migration skills and host country-specific human capital and a U-shaped pattern of immigrants' job mobility with initial downgrading and subsequent upgrading.