Wage discrimination against immigrants: measurement with firm-level productivity data

Table 3 Firm-level wage-setting equation with gender-immigrant interaction

Log av. hourly wage	OLS	OLS	OLS	OLS	Fixed effects	GMM-IV
Log av. hourly wage	(1)	(2)	(3)	(4)	(5)	(6)
Labor productivity	–	–	–	0.10*** (0.01)	0.01** (0.00)	−0.00 (0.00)
Share of male non-EU^a	−0.29*** (0.02)	−0.04*** (0.01)	−0.03** (0.01)	−0.03** (0.01)	−0.03** (0.01)	−0.04 (0.03)
Share of female non-EU^a	−0.12** (0.06)	−0.14*** (0.03)	−0.08*** (0.03)	−0.08*** (0.03)	−0.06* (0.03)	−0.10** (0.05)
Share of female EU^a	−0.08*** (0.01)	−0.20*** (0.01)	−0.21*** (0.01)	−0.18*** (0.01)	−0.10*** (0.03)	−0.15*** (0.05)
Year dummies	Yes	Yes	Yes	Yes	Yes	Yes
Individual and job characteristics^b	No	Yes	Yes	Yes	Yes	Yes
Sectors and regions^c	No	No	Yes	Yes	Yes	Yes
Firm characteristics^d	No	No	No	Yes	Yes	Yes
Observations	23,712	23,712	23,712	23,712	23,712	8333
Adjusted R ²	0.07	0.63	0.65	0.70		0.30
Within R ²					0.37
Between R ²					0.61
Underidentification test^e						0.00
Weak identification test^f						116.1
Overidentification test^g						0.53
Endogeneity test^h						0.52

Data source: SES-SBS 1999–2010; HAC standard errors in parentheses
***, **, * significant at 1, 5 and 10 % levels, respectively
^aOmitted reference: share of male EU workers
^bIndividual and job characteristics include share of workers younger than 40 years, share of 8 occupational groups (reference: service occupations); 3 educational levels (reference: ISCED 1–2); share of fixed-term contracts; share of workers with more than 5 years of tenure
^cSector and regional controls include 9 sectors (reference: manufacturing) and 3 regions (reference: Flanders)
^dFirm controls include the logarithm of firm size, the logarithm of capital and a dummy for firm-level collective bargaining. All regressions include year dummies
^eUnderidentifcation test reports p value of Kleibergen-Paap rk LM statistic
^fWeak identification test reports Kleibergen-Paap rk Wald F statistic
^gOveridentification test reports p value of Hansen J statistic
^hEndogeneity test shows probability that endogenous regressors can actually be treated as exogenous