IDEAS home Printed from https://ideas.repec.org/p/zbw/ifwkwp/967.html
   My bibliography  Save this paper

Endowment or Discrimination? An Analysis of Immigrant-Native Earnings Differentials in Switzerland

Author

Listed:
  • Golder, Stefan M.

Abstract

Recent studies have shown that there are significant earnings differentials between immigrants and natives in Switzerland. The goal of this paper is to determine whether these differences can be attributed to diverging socio-economic endowments or to discrimination. We use the well-known econometric technique, developed by Oaxaca (1973) and Blinder (1973), to determine the extent of discrimination. As data on earnings are available only for employed, we adopt a two-stage Heckman procedure to correct for sample-selection bias. Our analysis is based on data from the 1995 wave of the Swiss Labor Force Survey (SLFS). The decomposition of the earnings differential reveals that the discrimination effect plays a more important role in the explanation of the earnings differential than the endowment effect.

Suggested Citation

  • Golder, Stefan M., 2000. "Endowment or Discrimination? An Analysis of Immigrant-Native Earnings Differentials in Switzerland," Kiel Working Papers 967, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkwp:967
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/17832/1/kap967.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. James J. Heckman, 1976. "The Common Structure of Statistical Models of Truncation, Sample Selection and Limited Dependent Variables and a Simple Estimator for Such Models," NBER Chapters, in: Annals of Economic and Social Measurement, Volume 5, number 4, pages 475-492, National Bureau of Economic Research, Inc.
    2. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
    3. Golder, Stefan M. & Straubhaar, Thomas, 1998. "Migration to Switzerland: Some New Evidence," CEPR Discussion Papers 1791, C.E.P.R. Discussion Papers.
    4. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1.
    5. Jenkins, Stephen P., 1994. "Earnings discrimination measurement : A distributional approach," Journal of Econometrics, Elsevier, vol. 61(1), pages 81-102, March.
    6. Gary S. Becker, 1994. "Investment in Human Capital: Rates of Return," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, Third Edition, pages 59-160, National Bureau of Economic Research, Inc.
    7. Alan S. Blinder, 1973. "Wage Discrimination: Reduced Form and Structural Estimates," Journal of Human Resources, University of Wisconsin Press, vol. 8(4), pages 436-455.
    8. Andreas Diekmann & Henriette Engelhardt, 1995. "Einkommensungleichheit zwischen Frauen und Männern. Eine ökonometrische Analyse der Schweizer Arbeitskräfteerhebung," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 131(I), pages 57-83, March.
    9. Gary S. Becker, 1994. "Age, Earnings, Wealth, and Human Capital," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, Third Edition, pages 228-244, National Bureau of Economic Research, Inc.
    10. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
    11. Patrick Puhani, 2000. "The Heckman Correction for Sample Selection and Its Critique," Journal of Economic Surveys, Wiley Blackwell, vol. 14(1), pages 53-68, February.
    12. Reimers, Cordelia W, 1983. "Labor Market Discrimination against Hispanic and Black Men," The Review of Economics and Statistics, MIT Press, vol. 65(4), pages 570-579, November.
    13. Peter Kugler, 1988. "Lohndiskriminierung in der Schweiz: Evidenz von Mikrodaten," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 124(I), pages 23-47, March.
    14. Jacob A. Mincer, 1974. "Schooling and Earnings," NBER Chapters, in: Schooling, Experience, and Earnings, pages 41-63, National Bureau of Economic Research, Inc.
    15. Gary S. Becker, 1994. "Investment in Human Capital: Effects on Earnings," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, Third Edition, pages 29-58, National Bureau of Economic Research, Inc.
    16. David Neumark, 1988. "Employers' Discriminatory Behavior and the Estimation of Wage Discrimination," Journal of Human Resources, University of Wisconsin Press, vol. 23(3), pages 279-295.
    17. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    18. Nielsen, H.S., 1998. "Two Notes of Discrimination and Decomposition," Papers 98-01, Centre for Labour Market and Social Research, Danmark-.
    19. Becker, Gary S., 1971. "The Economics of Discrimination," University of Chicago Press Economics Books, University of Chicago Press, edition 2, number 9780226041162, December.
    20. Velling, Johannes, 1995. "Wage discrimination and occupational segregation of foreign male workers in Germany," ZEW Discussion Papers 95-04, ZEW - Leibniz Centre for European Economic Research.
    21. Cotton, Jeremiah, 1988. "On the Decomposition of Wage Differentials," The Review of Economics and Statistics, MIT Press, vol. 70(2), pages 236-243, May.
    22. Dorothe Bonjour & Michael Gerfin, 1995. "Einkommensungleichheit zwischen Frauen und M nnern. Eine konomische Analyse der Schweizer Arbeitskr fteerhebung: Kommentar," Diskussionsschriften dp9503, Universitaet Bern, Departement Volkswirtschaft.
    23. Heckman, James J, 1974. "Shadow Prices, Market Wages, and Labor Supply," Econometrica, Econometric Society, vol. 42(4), pages 679-694, July.
    24. Dolton, P J & Makepeace, G H, 1986. "Sample Selection and Male-Female Earnings Differentials in the Graduate Labour Market," Oxford Economic Papers, Oxford University Press, vol. 38(2), pages 317-341, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Michael Chletsos & Stelios Roupakias, 2017. "Native-immigrant wage differentials in Greece: discrimination and assimilation," Applied Economics, Taylor & Francis Journals, vol. 49(17), pages 1732-1736, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Golder, Stefan M. & Straubhaar, Thomas, 1999. "Discrimination in the Swiss Labour Market: an Empirical Analysis," CEPR Discussion Papers 2100, C.E.P.R. Discussion Papers.
    2. Sile Padraigin O'Dorchai, 2008. "Do women gain or lose from becoming mothers?," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 51(2/3), pages 243-268.
    3. Tushar Agrawal, 2014. "Gender and caste-based wage discrimination in India: some recent evidence [Geschlecht und Kaste-ansässige Lohndiskriminierung in Indien: Einige Neue Beweise]," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 47(4), pages 329-340, December.
    4. Somasree Poddar & Ishita Mukhopadhyay, 2019. "Gender Wage Gap: Some Recent Evidences from India," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 17(1), pages 121-151, March.
    5. Dileni Gunewardena & Darshi Abeyrathna & Amalie Ellagala & Kamani Rajakaruna & Shobana Rajendran, 2008. "Glass Ceilings, Sticky Floors or Sticky Doors? A Quantile Regression Approach to Exploring Gender Wage Gaps in Sri Lanka," Working Papers PMMA 2008-04, PEP-PMMA.
    6. Pedro Jesús Hernandez Martinez, 1995. "Análisis empírico de la discriminación salarial de la mujer en España," Investigaciones Economicas, Fundación SEPI, vol. 19(2), pages 195-215, May.
    7. Gomes, Magno Rogério & Souza, Solange de Cássia Inforzato de & Mantovani, Gabriela Gomes & Paiva, Vanessa Fortunato de, 2020. "Wage gap decomposition models: A methodological contribution," Brazilian Review of Econometrics, Sociedade Brasileira de Econometria - SBE, vol. 39(2), March.
    8. Gomes, Magno Rogério & Souza, Solange de Cássia Inforzato de & Mantovani, Gabriela Gomes & Paiva, Vanessa Fortunato de, 2019. "Wage gap decomposition models: A methodological contribution," Brazilian Review of Econometrics, Sociedade Brasileira de Econometria - SBE, vol. 39(2).
    9. P.W. Miller & S. Rummery, 1989. "Gender Wage Discrimination in Australia: A reassessment," Economics Discussion / Working Papers 89-21, The University of Western Australia, Department of Economics.
    10. S. C. Noah Uhrig & Nicole Watson, 2020. "The Impact of Measurement Error on Wage Decompositions: Evidence From the British Household Panel Survey and the Household, Income and Labour Dynamics in Australia Survey," Sociological Methods & Research, , vol. 49(1), pages 43-78, February.
    11. Niels-Hugo Blunch, 2018. "Just like a woman? New comparative evidence on the gender income gap across Eastern Europe and Central Asia," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 8(1), pages 1-41, December.
    12. Günalp, Burak & Cilasun, Seyit Mümin & Acar, Elif Öznur, 2013. "Male-Female Labor Market Participation and the Extent of Gender-Based Wage Discrimination in Turkey," MPRA Paper 51503, University Library of Munich, Germany.
    13. Gustavo Yamada, 2007. "Retornos a la educación superior en el mercado laboral: ¿vale la pena el esfuerzo?," Diagnóstico y propuesta, Consorcio de Investigación Económica y Social.
    14. Polachek, Solomon W., 2008. "Earnings Over the Life Cycle: The Mincer Earnings Function and Its Applications," Foundations and Trends(R) in Microeconomics, now publishers, vol. 4(3), pages 165-272, April.
    15. Fortin, Nicole & Lemieux, Thomas & Firpo, Sergio, 2011. "Decomposition Methods in Economics," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 1, pages 1-102, Elsevier.
    16. Ma, Xinxin, 2022. "Parenthood and the gender wage gap in urban China," Journal of Asian Economics, Elsevier, vol. 80(C).
    17. Niels-Hugo Blunch & Nabanita Datta Gupta, 2014. "Social Networks and Health Knowledge in India: Who You Know or Who You Are?," Economics Working Papers 2014-24, Department of Economics and Business Economics, Aarhus University.
    18. Günalp, Burak & Cilasun, Seyit Mümin & Acar, Elif Öznur, 2013. "Male-Female Labor Market Participation and the Extent of Gender-Based Wage Discrimination in Turkey," MPRA Paper 51503, University Library of Munich, Germany.
    19. Ben Jann, 2008. "A Stata implementation of the Blinder-Oaxaca decomposition," ETH Zurich Sociology Working Papers 5, ETH Zurich, Chair of Sociology, revised 14 May 2008.
    20. Zhang, Li & Sharpe, Rhonda Vonshay & Li, Shi & Darity, William A., 2016. "Wage differentials between urban and rural-urban migrant workers in China," China Economic Review, Elsevier, vol. 41(C), pages 222-233.

    More about this item

    Keywords

    International Migration; Wage Differentials; Immigrant Workers; Discrimination;
    All these keywords.

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:ifwkwp:967. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/iwkiede.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.