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Analyzing income gap between migrant and local workers

In this paper, the dataset to be collated from 401 migrant and local workers will be analyzed to define primary factors affecting such gap and changes in income. Additionally, Mincer’s equations, Oaxaca-Blinder decomposition technique, and the quantile regression model by Koenker and Bassett are utilized to facilitate the analysis. | ECONOMIC DEVELOPMENT No. 208, December 2011 ANALYZING INCOME GAP BETWEEN MIGRANT AND LOCAL WORKERS by HUYØNH TRÖÔØNG HUY* To study gap in income between groups of worker has thus far attracted many economic researchers. In this paper, the dataset to be collated from 401 migrant and local workers will be analyzed to define primary factors affecting such gap and changes in income. Additionally, Mincer’s equations, Oaxaca-Blinder decomposition technique, and the quantile regression model by Koenker and Bassett are utilized to facilitate the analysis. The findings show that years of schooling and working experience play an important role in improving income in general; income gap can be explained by gap in years of schooling, working experience, and gender; and such gap show an upward tendency under the impacts of glass ceiling. Keyword: labor, income estimates, income gap, human capital 1. Introduction Market discrimination has been a matter of concern to labor economists such as Blinder (1973); Christofides, Polycarpou and Vrachimis (2010), Fang and Sakellariou (2011); Oaxaca (1973); and Reimer (1983). Impacts of gender, ethnicity, occupation, etc. on income gap have been taken into account with the support of various methods. For instance, Oaxaca (1973) and Blender (1973) analyzed income gap between migrant workers and local ones based on human capital, individual characteristics and market discrimination. Recently, Borjas (2010), in his Labor Economics, has also mentioned the market discrimination which includes discrimination from employers and local workers against migrant workers. Overall, recent researches (such as those by Hundel [2000]; Kapsos [2008]; Christofides, Polycarpou and Vrachimis [2010], and Fang and Sakellariou [2011]) often utilize the Oaxaca-Blender decomposition technique to analyze income gap on the basis of gender and occupation. In Vietnam, this issue has recently been discovered from other angles. Walle and Gunewardena (2001), based .