Reference : Foreign Workers and the Wage Distribution: What Does the Influence Function Reveal?
Scientific journals : Article
Business & economic sciences : Quantitative methods in economics & management
Computational Sciences
http://hdl.handle.net/10993/37030
Foreign Workers and the Wage Distribution: What Does the Influence Function Reveal?
English
Choe, Chung[Hanyang University, Ansan, South Korea]
Van Kerm, Philippe[University of Luxembourg > Faculty of Language and Literature, Humanities, Arts and Education (FLSHASE) > Integrative Research Unit: Social and Individual Development (INSIDE) > ; Luxembourg Institute of Socio-Economic Research - LISER]
[en] This paper draws upon influence function regression methods to determine where foreign workers stand in the distribution of private sector wages in Luxembourg, and assess whether and how much their wages contribute to wage inequality. This is quantified by measuring the effect that a marginal increase in the proportion of foreign workers—foreign residents or cross-border workers—would have on selected quantiles and measures of inequality. 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, 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.
[Hanyang University, Ansan, South Korea]
