Are Syrians Refugees Earn Less than Natives and Other Migrants in Jordan: Evidence from Distributional Analysis of Wage Differentials

This paper examines the wage differentials between Syrian refugees and native-born and nonrefugee migrant workers using a nationally representative data set extracted from the most recent Jordanian Labor Market Panel Survey (JLMPS 2016). On average, Syrian refugees earn 37.2% and 74% less hourly wages than natives and non-refugee workers, respectively. The observed wage differentials are not uniform through the wage distribution, and wage gaps are found to be much higher at the top end than at the bottom and the middle of the wage distribution. By applying newly developed decomposition methods, we decompose the distributional wage differentials between different groups into a composition effect, explained by differences in productivity characteristics, and a discrimination effect attributable to unequal returns to those covariates. We find, on average, that discrimination effect contributes more to the wage gaps than composition effect, while through the first part of wage distribution, endowment effect is found to dominate the wage differentials between native-born and Syrian refugee workers. The compositional differences in education between refugees and nonrefugees are found to explain significantly the wage gaps and endowment effects at bottom and middle parts of wage distribution, but when moving up reverse of that is happened by being responsible for a substantial part of discrimination effect.