Wage discrimination based on the country of birth: do tenure and product market competition matter?

Abstract

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Wage Differences According to Workers' Origin: The Role of Working More Upstream in GVCs

“…Ethnic segregation and/or discrimination in performance-related pay might also be part of the explanation (Fang & Heywood, 2010). Interestingly, these arguments echo the estimates of Fays et al (2021),…”

“…Focusing on the Belgian private sector, Kampelmann and Rycx (2016) further show that the wage penalty against immigrants born outside Western Europe still amounts to 6.1% after controlling for a wide range of covariates (including average firm-level productivity), a result the authors interpret as discrimination. In addition, the estimates by Fays et al (2021) and Grinza et al (2020), also for the Belgian labour market, suggest that wage discrimination against immigrants ranges between 7 and 17.5% for those born in Africa and Asia, respectively, and that it is greater in firms with high diversity and more limited in highly competitive product market situations.…”

Wage Effects of Educational Mismatch According to Workers’ Origin: The Role of Demographics and Firm Characteristics

“…More precisely, our study is one of the first to take explicit account of the heterogeneity of immigrants in terms of region of birth (i.e. to go beyond the traditional 'native vs. immigrant' approach), as this heterogeneity has been shown to influence the transferability of human capital (Ramos et al, 2015), workers' likelihood of being over-educated (Jacobs et al, 2021), and the extent of wage discrimination (Fays et al, 2021). Our paper also contributes to the existing literature by investigating the role played by gender and education, two moderating variables that have so far received little attention.…”

“…Jacobs et al, 2021) and the extent of wage discrimination (e.g. Fays et al, 2021) depend on immigrants' region of birth. For instance, analysing the US labour market using data from the 2000 Census, Chiswick and Miller (2008) find that the returns to required education are highly heterogeneous, ranging from 9% (e.g.…”

“…We therefore decided to go beyond the traditional 'native vs. immigrant' approach and to estimate the wage penalty associated with over-education for workers born in developed and in developing countries, respectively. 2 However, given the diversity among immigrants from developing countries, which has been shown to influence the transferability of human capital (Ramos et al, 2015), the probability of being over-educated (Jacobs et al, 2021), and the extent of wage discrimination (Grinza et al, 2020;Fays et al, 2021), we further distinguish immigrants from developing countries according to whether they were born in: i) Africa, ii) the Middle and Near East, iii) Asia, iv) Eastern Europe (non-EU), and v) Latin and Central America. 3 Our paper also contributes to the existing literature by investigating the role played by gender and education, two moderating variables that have so far received little attention.…”