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National Origin Differences in Wages and Hierarchical Positions

Romain Aeberhardt and Julien Pouget

Annals of Economics and Statistics, 2010, issue 99-100, 117-139

Abstract: This paper explains differences in wages and hierarchical positions in France according to national origin. Our data come from a matched employer-employee wage survey carried out in 2002. The business survey provides very reliable wage data which are matched to many individual-level variables collected in a household survey. The sample of male full-time workers is decomposed into three sub-samples according to the parents' birthplace (France, North Africa and Southern Europe). The large number of executives in the sample allows us to perform a switching regression model of wage determination and occupational employment. We adapt and extend existing decomposition methods to this framework. While the usual methods only take care of selection issues, we develop here a methodology to also take proper account of the related composition effects due to differences in hierarchical positions when comparing mean wage gaps. Moreover the method we use requires only the estimation of the model on the reference population, and therefore yields more precise results when the sample size of the group potentially discriminated against is small. Our results show no wage discrimination but a certain degree of occupational segregation yielding composition effects. Moreover, differences in the returns to some of the individual characteristics, including higher qualifications, might reveal mechanisms of statistical discrimination on the labor market.

Date: 2010
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Handle: RePEc:adr:anecst:y:2010:i:99-100:p:117-139