Wage differentials between natives and cross-border workers within and across establishments
AbstractLuxembourg has a very unusual labor market, with only 29% of Luxembourgish nationals. The remaining workforce is composed of immigrants (27%) and cross- border workers (44%) who live in one of the three surrounding countries which are France, Germany and Belgium. Research on economic outcomes of immigrants has been a major focus of labor market research in many countries, but the cross-border population has only attracted scarce attention. Even though this topic is of limited relevance in most countries at the national level, similar situations as in Luxembourg can be found in regional and local labor markets in most other countries, around ma- jor cities for example. In this paper we use the example of Luxembourg to investi- gate the determinants of the wage gap between natives and cross-border workers. We first analyze whether this specific commuting workforce is concerned, like the non na- tional population in many other labor markets, by segregation into low-wage firms. We then use a matched employer-employee dataset to investigate the role that firm-specific characteristics play in determining the wage gap. This approach opens interesting per- spectives for expanding the literature on the native-immigrants wage gap.
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Bibliographic InfoPaper provided by CEPS/INSTEAD in its series CEPS/INSTEAD Working Paper Series with number 2014-04.
Length: 20 pages
Date of creation: May 2014
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wage gap; cross-border labor market; segregation; multilevel modeling;
Find related papers by JEL classification:
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- 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
- R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
This paper has been announced in the following NEP Reports:
- NEP-ALL-2014-05-17 (All new papers)
- NEP-EUR-2014-05-17 (Microeconomic European Issues)
- NEP-LAB-2014-05-17 (Labour Economics)
- NEP-MIG-2014-05-17 (Economics of Human Migration)
- NEP-URE-2014-05-17 (Urban & Real Estate Economics)
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