In this article, the author proposes a new method for measuring wage discrimination that builds on the methodology first developed by Hellerstein and Neumark (1999). The author’s method has three main advantages: It is robust to labor market segregation, it does not impose linearity on the wage-setting equation, and it is not only a test for discrimination but also produces a measure of discrimination. Using matched employer-employee data from Germany, the author finds that immigrants are being discriminated against. They receive wages that are 13% lower than native workers in the same firm.

In this paper I propose and estimate an equilibrium search model using matched employer-employee data to study the extent to which wage di¤erentials between men and women can be explained by differences in productivity, disparities in friction patterns or wage discrimination. The availability of matched employer-employee data is essential to empirically disentangle di¤erences in workers productivity across groups from di¤erences in wage policies toward those groups. The model features rent splitting, on-the-job search and two-sided heterogeneity in productivity. It is estimated using German microdata. I …nd that female workers are less productive and more mobile than males. The total gender wage gap is 34 percent. It turns out that most of the gap is accounted for by di¤erences in productivity and that di¤erences in destruction rates explain 1.4 percent of the total wage-gap. Netting out di¤erences in o¤er-arrival rates would increase the gap by 2.6 percent. I …nd no signi…cant evidence of discrimination against women in Germany.JEL Code: J70, C51, J64

We propose a novel methodology to uncover the sorting pattern in labor markets. We identify the strength of sorting solely from a ranking of firms by profits. To discern the sign of sorting, we build a noisy ranking of workers from wage data. Our test for the sign of sorting is consistent even with noisy worker rankings. We apply our approach to a panel dataset that combines social security earnings records with detailed financial data for firms in the Veneto region of Italy. We find robust evidence of positive sorting. The correlation between worker and firm types is about 52 percent. (JEL J24, J31, J41, J62, L25)

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu We propose a simple test that uses information on workers' mobility, wages and firms' profits to identify the sign and strength of assortative matching. The basic intuition underlying our empirical strategy is that, in the presence of positive (negative) assortative matching, good workers are more (less) likely to move to better firms than bad workers. Assuming that agents' payoffs are increasing in their own types, our test exploits within-firm variation on wages to rank workers by their types and firm profits to rank firms. We use a panel data set that combines social security earnings records for workers in the Veneto region of Italy with detailed balance-sheet data for firms. We find robust evidence that positive assortative matching is pervasive in the labor market. This result is in contrast with what we find from correlating the worker and firm fixed effects in standard Mincerian wage equations. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SJEL Classification: J6, J31, L2