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

Valentine Fays, Benoît Mahy, Francois Rycx and Mélanie Volral

Applied Economics, 2021, vol. 53, issue 13, 1551-1571

Abstract: Using a merged employer-employee panel dataset of more than 13,000 firms relative to the Belgian private sector for the 1999–2010 period, this paper aims to quantify wage discrimination against migrant workers based on their countries of birth, with workers’ tenure and firm product market competition as moderating variables. To do so, we specify a wage-setting equation that includes a direct measure of worker productivity. We control for a wide range of worker and firm characteristics, as well as time-invariant unobserved heterogeneity in firms and potential endogeneity in the composition of the workforce. Our results show large disparities in wage discrimination against foreign-born migrants depending on their countries of birth. They also suggest that wage discrimination against migrants vanishes as their firm-specific labour market experience (i.e. tenure) increases and tends to disappear in highly competitive product market situations.

Date: 2021
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Citations: View citations in EconPapers (19)

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Working Paper: Wage Discrimination Based on the Country of Birth: Do Tenure and Product Market Competition Matter? (2019)
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DOI: 10.1080/00036846.2020.1838431

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