A Counterfactual Decomposition Analysis of Immigrants-Natives Earnings in Malaysia
33 Pages Posted: 19 Dec 2011
Date Written: 2011
Abstract
Economics of discrimination has been the topic of interest of many in the last decade or two. Human capital theory describes wage determination as a function of labour human capital and should be determined based on marginal productivity theorem of labour economics. Islamic theology also dictates paying labour well in time and equal to their productivity not based on his colour, race, gender, nationality health status and other non-economic factors. The current study analyses the immigrants-natives wage gap to find the extent of potential discrimination against the immigrants. Using employees' level data from the Enterprise Surveys by the World Bank in 2007, standard Oaxaca-Blinder technique and Machado-Mata counterfactual decomposition is applied. Findings indicate an existence of earning's differential in favour of natives or the Malaysian citizens and immigrants have a disadvantage. On the other hand, the differential increases until the middle of income distribution and the start declining. It suggests higher-income groups have a low level of discriminatory disadvantage. Labour market productivity could be increased if this differential is reduced, which motivates the employees.
Keywords: Labour market discrimination, Oaxaca-Blinder decomposition, Machado-Mata decomposition, quantile regression, earnings differential, enterprise survey, World Bank, Malaysia
JEL Classification: J, J1, J3, J7
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
By Alícia Adserà and Barry R. Chiswick
-
The Economic Situation of First- and Second-Generation Immigrants in France, Germany, and the UK
By Yann Algan, Christian Dustmann, ...
-
Immigrant Labour Market Assimilation and Arrival Effects: Evidence from the UK Labour Force Survey
By Kenneth Clark and Joanne Lindley
-
Human Capital and Earnings of Female Immigrants to Australia, Canada, and the United States
By Heather Antecol, Deborah A. Cobb-clark, ...
-
Gender, Comparative Advantage and Labor Market Activity in Immigrant Families
-
The Immigrant Wage Gap in Germany
By Alisher Aldashev, Johannes Gernandt, ...
-
Dynamics and Diversity: Ethnic Employment Differences in England and Wales, 1991-2001
By Kenneth Clark and Stephen Drinkwater
-
National Origin Wage Differentials in France: Evidence from Matched Employer-Employee Data
By Romain Aeberhardt and Julien Pouget