The Place Premium : Wage Differences for Identical Workers Across the US Border

This paper compares the wages of workers inside the United States to the wages of observably identical workers outside the United States-controlling for country of birth, country of education, years of education, work experience, sex, and rural-urban residence. This is made possible by new and uniqu...

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Main Authors:	Clemens, Michael A., Montenegro, Claudio E., Pritchett, Lant
Language:	English
Published:	Washington, DC: World Bank 2012
Subjects:	World Development Report 2009
Online Access:	http://hdl.handle.net/10986/9230

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recordtype	oai_dc
spelling	okr-10986-92302021-04-23T14:02:44Z The Place Premium : Wage Differences for Identical Workers Across the US Border Clemens, Michael A. Montenegro, Claudio E. Pritchett, Lant World Development Report 2009 This paper compares the wages of workers inside the United States to the wages of observably identical workers outside the United States-controlling for country of birth, country of education, years of education, work experience, sex, and rural-urban residence. This is made possible by new and uniquely rich microdata on the wages of over two million individual formal-sector wage-earners in 43 countries. The paper then uses five independent methods to correct these estimates for unobserved differences and introduces a selection model to estimate how migrants' wage gains depend on their position in the distribution of unobserved wage determinants. Following all adjustments for selectivity and compensating differentials, the authors estimate that the wages of a Bolivian worker of equal intrinsic productivity, willing to move, would be higher by a factor of 2.7 solely by working in the United States. While this is the median, this ratio is as high as 8.4 (for Nigeria). The paper documents that (1) for many countries, the wage gaps caused by barriers to movement across international borders are among the largest known forms of wage discrimination; (2) these gaps represent one of the largest remaining price distortions in any global market; and (3) these gaps imply that simply allowing labor mobility can reduce a given household's poverty to a much greater degree than most known in situ antipoverty interventions. 2012-06-26T15:42:00Z 2012-06-26T15:42:00Z 2009 http://hdl.handle.net/10986/9230 English CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Washington, DC: World Bank
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	World Development Report 2009
spellingShingle	World Development Report 2009 Clemens, Michael A. Montenegro, Claudio E. Pritchett, Lant The Place Premium : Wage Differences for Identical Workers Across the US Border
description	This paper compares the wages of workers inside the United States to the wages of observably identical workers outside the United States-controlling for country of birth, country of education, years of education, work experience, sex, and rural-urban residence. This is made possible by new and uniquely rich microdata on the wages of over two million individual formal-sector wage-earners in 43 countries. The paper then uses five independent methods to correct these estimates for unobserved differences and introduces a selection model to estimate how migrants' wage gains depend on their position in the distribution of unobserved wage determinants. Following all adjustments for selectivity and compensating differentials, the authors estimate that the wages of a Bolivian worker of equal intrinsic productivity, willing to move, would be higher by a factor of 2.7 solely by working in the United States. While this is the median, this ratio is as high as 8.4 (for Nigeria). The paper documents that (1) for many countries, the wage gaps caused by barriers to movement across international borders are among the largest known forms of wage discrimination; (2) these gaps represent one of the largest remaining price distortions in any global market; and (3) these gaps imply that simply allowing labor mobility can reduce a given household's poverty to a much greater degree than most known in situ antipoverty interventions.
author	Clemens, Michael A. Montenegro, Claudio E. Pritchett, Lant
author_facet	Clemens, Michael A. Montenegro, Claudio E. Pritchett, Lant
author_sort	Clemens, Michael A.
title	The Place Premium : Wage Differences for Identical Workers Across the US Border
title_short	The Place Premium : Wage Differences for Identical Workers Across the US Border
title_full	The Place Premium : Wage Differences for Identical Workers Across the US Border
title_fullStr	The Place Premium : Wage Differences for Identical Workers Across the US Border
title_full_unstemmed	The Place Premium : Wage Differences for Identical Workers Across the US Border
title_sort	place premium : wage differences for identical workers across the us border
publisher	Washington, DC: World Bank
publishDate	2012
url	http://hdl.handle.net/10986/9230
_version_	1764408957315579904

The Place Premium : Wage Differences for Identical Workers Across the US Border

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