Foreign workers and the wage distribution: Where do they fit in?

Chung Choe and Philippe Van Kerm

No 2014-02, LISER Working Paper Series from Luxembourg Institute of Socio-Economic Research (LISER)

Abstract: The presence of foreign workers is commonly deemed as driving wage inequality upwards. By 2006, seven in ten private sector workers in Luxembourg were foreign. This note builds on recentered influence function regression methods to identify where these foreign workers stand in the distribution of private sector wages, and assess whether and how much their wages contribute to overall wage inequality. Our analysis of the 2006 Structure of Earnings Survey reveals that foreign workers have generally lower wages than natives and therefore tend to haul the overall wage distribution downwards. Yet, surprizingly, their influence on wage inequality reveals small and negative. All impacts are further muted when accounting for human capital and, especially, job characteristics. Not observing any large positive inequality contribution on the Luxembourg labour market is a striking result given the sheer size of the foreign workforce and its polarization at both ends of the skill distribution.

Keywords: immigrant wages; wage inequality; cross-border workers; influence function; RIF regression; Luxembourg (search for similar items in EconPapers)
JEL-codes: J15 J31 J61 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2014-05
New Economics Papers: this item is included in nep-lab and nep-mig
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
https://www.liser.lu/publi_viewer.cfm?tmp=2521 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:irs:cepswp:2014-02

Access Statistics for this paper

More papers in LISER Working Paper Series from Luxembourg Institute of Socio-Economic Research (LISER) 11, Porte des Sciences, L-4366 Esch-sur-Alzette, G.-D. Luxembourg. Contact information at EDIRC.
Bibliographic data for series maintained by Library and Documentation ( this e-mail address is bad, please contact ).