Working Paper: CEPR ID: DP2100
Authors: Stefan M. Golder; Thomas Straubhaar
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 Labour Force Survey (SLFS). The earnings difference decomposition between natives and immigrants reveals that the discrimination effect plays a more important role in the explanation of the earnings differentials than the endowment effect.
Keywords: International Migration; Wage Differentials; Immigrant Workers; Discrimination
JEL Codes: F22; J31; J61; J71
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Discrimination (J71) | Earnings Differential (Natives vs. Immigrants) (J31) |
| Schooling and Experience (J24) | Earnings Differential (Males) (J31) |
| Discrimination (J71) | Rate of Return on Education and Experience (Immigrants) (I26) |
| Discrimination (J71) | Earnings Differential (Females) (J31) |
| Endowment Effect (D11) | Earnings Differential (Females) (J31) |
| Nationality Group Specific Variables (J15) | Discrimination Effect (Both Genders) (J71) |