Working Paper: CEPR ID: DP17027
Authors: Mario Pagliero; Maria Koumenta; Davud Rostam Afschar
Abstract: We study how licensing, certification and unionisation affect the wages of natives and migrants and theirrepresentation among licensed, certified, and unionized workers. We provide evidence of a dual role of labormarket institutions, which both screen workers based on unobservable characteristics and also provide themwith wage setting power. Labor market institutions confer significant wage premia to native workers (4, 1.6,and 2.7 log points for licensing, certification, and unionization respectively), due to screening and wagesetting power. Wage premia are significantly larger for licensed and certified migrants (10.3 and 6.6 logpoints), reflecting a more intense screening of migrant than native workers. The representation of migrantsamong licensed (but not certified or unionized) workers is 15% lower than that of natives. This again impliesa more intense screening of migrants by licensing institutions than by certification and unionization.
Keywords: occupational regulation; licensing; certification; unionization; migration; wages
JEL Codes: J61; J31; J44; J71; J16
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| screening and wage setting mechanisms (J78) | labor market outcomes for migrants (J61) |
| licensing (D45) | wage premiums for native workers (J39) |
| certification (Q48) | wage premiums for native workers (J39) |
| unionization (J50) | wage premiums for native workers (J39) |
| licensing (D45) | wage premiums for licensed migrants (J31) |
| certification (Q48) | wage premiums for certified migrants (J39) |
| representation of migrants among licensed workers (J61) | screening effect by licensing institutions (D45) |
| institutional affiliation (I23) | migrant wage gap (J31) |