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Understanding the Native-Immigrant Wage Gap Using Matched Employer-Employee Data. Evidence from Germany

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  • Cristian Bartolucci

Abstract

Hellerstein and Neumark (1999) developed a straightforward method to detect wage discrimination using matched employer-employee data. In this paper a new method to measure wage discrimination is proposed, that builds on the ideas first developed by Hellerstein and Neumark. It has four main advantages: it is robust to labor market segregation, it does not impose linearity on the wage setting equation, it avoids the problematic estimation of production functions, and it is not only a test for discrimination but also produces measures of discrimination. Using matched employer-employee data from Germany, I find that immigrants are being discriminated against. They receive wages which are 13 percent lower than native workers in the same firm.

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Bibliographic Info

Paper provided by Collegio Carlo Alberto in its series Carlo Alberto Notebooks with number 150.

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Length: 51 pages
Date of creation: 2010
Date of revision:
Handle: RePEc:cca:wpaper:150

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Keywords: Labor market discrimination; immigration; matched employer-employee data;

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  1. Johannes Van Biesebroeck, 2008. "Wage and Productivity Premiums in Sub-Saharan Africa," NBER Chapters, in: The Analysis of Firms and Employees: Quantitative and Qualitative Approaches, pages 345-371 National Bureau of Economic Research, Inc.
  2. Stefan Bender & Julia Lane & Kathryn Shaw & Fredrik Andersson & Till von Wachter, 2008. "The Analysis of Firms and Employees: Quantitative and Qualitative Approaches," NBER Books, National Bureau of Economic Research, Inc, number bend08-1, May.
  3. Black, Dan A, 1995. "Discrimination in an Equilibrium Search Model," Journal of Labor Economics, University of Chicago Press, vol. 13(2), pages 309-33, April.
  4. Dong, Xiao-yuan & Zhang, Liqin, 2009. "Economic transition and gender differentials in wages and productivity: Evidence from Chinese manufacturing enterprises," Journal of Development Economics, Elsevier, vol. 88(1), pages 144-156, January.
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Cited by:
  1. Panagiotis Nanos & Christian Schluter, 2013. "The Composition of Wage Differentials between Migrants and Natives," Papers 1306.1781, arXiv.org, revised Oct 2013.
  2. Humpert, Stephan, 2013. "The immigrant-native pay gap in Germany," MPRA Paper 50413, University Library of Munich, Germany.

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