Wage differentials between natives and cross-border workers within and across establishments

Jacques Brosius, Jean-Claude Ray, Bertrand Verheyden and Donald Williams

No 2014-04, LISER Working Paper Series from Luxembourg Institute of Socio-Economic Research (LISER)

Abstract: Luxembourg has a very unusual labor market, with only 29% of Luxembourgish nationals. The remaining workforce is composed of immigrants (27%) and cross- border workers (44%) who live in one of the three surrounding countries which are France, Germany and Belgium. Research on economic outcomes of immigrants has been a major focus of labor market research in many countries, but the cross-border population has only attracted scarce attention. Even though this topic is of limited relevance in most countries at the national level, similar situations as in Luxembourg can be found in regional and local labor markets in most other countries, around ma- jor cities for example. In this paper we use the example of Luxembourg to investi- gate the determinants of the wage gap between natives and cross-border workers. We first analyze whether this specific commuting workforce is concerned, like the non na- tional population in many other labor markets, by segregation into low-wage firms. We then use a matched employer-employee dataset to investigate the role that firm-specific characteristics play in determining the wage gap. This approach opens interesting per- spectives for expanding the literature on the native-immigrants wage gap.

Keywords: wage gap; cross-border labor market; segregation; multilevel modeling (search for similar items in EconPapers)
JEL-codes: J31 J61 J71 R23 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2014-05
New Economics Papers: this item is included in nep-eur, nep-lab, nep-mig and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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