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Wage discrimination against immigrants: measurement with firm-level productivity data

Author

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  • Stephan Kampelmann

    (Université Libre de Bruxelles, SBS-EM (CEB and DULBEA))

  • François Rycx

    (Université Libre de Bruxelles, SBS-EM (CEB and DULBEA)
    Université Catholique de Louvain (IRES)
    IZA)

Abstract

This paper is one of the first to use employer-employee data on wages and labor productivity to measure discrimination against immigrants. We build on an identification strategy proposed by Bartolucci (Ind Labor Relat Rev 67(4):1166–1202, 2014) and address firm fixed effects and endogeneity issues through a diff GMM-IV estimator. Our models also test for gender-based discrimination. Empirical results for Belgium suggest significant wage discrimination against women and (to a lesser extent) against immigrants. We find no evidence for double discrimination against female immigrants. Institutional factors such as firm-level collective bargaining and smaller firm sizes are found to attenuate wage discrimination against foreigners, but not against women. JEL Classification: J15, J16, J24, J31, J7

Suggested Citation

  • Stephan Kampelmann & François Rycx, 2016. "Wage discrimination against immigrants: measurement with firm-level productivity data," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-24, December.
    • Handle: RePEc:spr:izamig:v:5:y:2016:i:1:d:10.1186_s40176-016-0063-1
    DOI: 10.1186/s40176-016-0063-1
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    Cited by:

    1. Valentine Fays & Benoît Mahy & François Rycx, 2023. "Wage differences according to workers' origin: The role of working more upstream in GVCs," LABOUR, CEIS, vol. 37(2), pages 319-342, June.
    2. Valentine Fays & Benoît Mahy & François Rycx & Mélanie Volral, 2021. "Wage discrimination based on the country of birth: do tenure and product market competition matter?," Applied Economics, Taylor & Francis Journals, vol. 53(13), pages 1551-1571, March.
    3. Valentine Jacobs & Kevin Pineda-Hernández & François Rycx & Mélanie Volral, 2023. "Does over-education raise productivity and wages equally? The moderating role of workers’ origin and immigrants’ background," Education Economics, Taylor & Francis Journals, vol. 31(6), pages 698-724, November.
    4. Grotti, Raffaele & Russell, Helen & Fahey, Éammon & Maître, Bertrand, 2018. "Discrimination and inequality in housing in Ireland," Research Series, Economic and Social Research Institute (ESRI), number BKMNEXT361.
    5. Sacit Hadi Akdede & Eleftherios Giovanis, 2022. "The Impact of Migration Flows on Well-Being of Elderly Natives and Migrants: Evidence from the Survey of Health, Ageing and Retirement in Europe," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 160(2), pages 935-967, April.
    6. Andrej Cupák & Pavel Ciaian & d'Artis Kancs, 2021. "Comparing the immigrant-native pay gap: A novel evidence from home and host countries," EERI Research Paper Series EERI RP 2021/05, Economics and Econometrics Research Institute (EERI), Brussels.
    7. V. Jacobs & F. Rycx & M. Volral, 2022. "Wage Effects of Educational Mismatch According to Workers’ Origin: The Role of Demographics and Firm Characteristics," De Economist, Springer, vol. 170(4), pages 459-501, November.
    8. Pineda-Hernández, Kevin & Rycx, François & Volral, Mélanie, 2022. "Moving Up the Social Ladder? Wages of First- and Second-Generation Immigrants from Developing Countries," GLO Discussion Paper Series 1204, Global Labor Organization (GLO).
    9. Elena Grinza & Stephan Kampelmann & François Rycx, 2020. "L’union fait la force? Evidence for wage discrimination in firms with high diversity," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 18(2), pages 181-211, June.
    10. Jacobs, Valentine & Mahy, Benoît & Rycx, François & Volral, Mélanie, 2019. "The Heterogeneous Effects of Workers' Countries of Birth on Over-Education," IZA Discussion Papers 12705, Institute of Labor Economics (IZA).
    11. Meenakshi Fernandes & d'Artis Kancs & Cecilia Navarra, 2021. "Legal migration policy and law," EERI Research Paper Series EERI RP 2021/10, Economics and Econometrics Research Institute (EERI), Brussels.
    12. Valentine Jacobs, 2021. "Wage Effects of Educational Mismatch According to Workers’ Origin: The Role of Demographics and Firm Characteristics," DULBEA Working Papers 23562, ULB -- Universite Libre de Bruxelles.
    13. Nicholas Lawson, 2024. "Discrimination and the Fiscal Benefits of Immigration," Working Papers 24-01, Research Group on Human Capital, University of Quebec in Montreal's School of Management.

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    More about this item

    Keywords

    Wages; Productivity; Discrimination; Workers’ origin; Gender; Linked employer-employee panel data;
    All these keywords.

    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J7 - Labor and Demographic Economics - - Labor Discrimination

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