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The Effect of Host Society Culture on Migrant Wage Discrimination: Approaching the Roestigraben

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Abstract

This paper investigates whether host society culture affects migrant wage discrimination, i.e. whether migrant wage discrimination is more intense in host societies where culture is more inward-looking. The motivation for this investigation in the Swiss context stems from two stylized facts showing that (i) political preferences on issues related to migration, asylum and naturalization of foreigners are markedly more conservative in the German region and (ii) that average wage differences between migrants and natives are larger in the German region. Building on this, the paper begins with a comparison of returns to factors (for eight migrant groups compared to natives) using a human capital model of wage determination. It then performs an Oaxaca decomposition of wage differentials in order to compare its unexplained component across groups and regions. The last step consists in implementing a regression discontinuity design approach to establish whether host society culture is one of the determinants explaining differences in migrant wage discrimination across the language border. Results show returns to factors of wage-earning migrants are lower in the German region for a preponderant majority of migrant groups. The analysis of wage differentials and the associated unexplained parts also support the hypothesis that wage discrimination is more pronounced in this region of the Swiss labor market. Finally, results of the regression discontinuity design approach confirm that host society culture is one of the determinants of wage discrimination endured by migrants.

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  • Pierre Kohler, 2012. "The Effect of Host Society Culture on Migrant Wage Discrimination: Approaching the Roestigraben," IHEID Working Papers 08-2012, Economics Section, The Graduate Institute of International Studies.
    • Handle: RePEc:gii:giihei:heidwp08-2012
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    Cited by:

    1. Gil S. Epstein & Dalit Gafni & Erez Siniver, 2014. "Even Education and Experience Has Its Limits: Closing the Wage Gap," Working Papers 2014-14, Bar-Ilan University, Department of Economics.

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    More about this item

    Keywords

    immigration; migration; labour market; culture; political preferences; wage discrimination; Switzerland;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
    • Z10 - Other Special Topics - - Cultural Economics - - - General
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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