University of Western Sydney

Are Migrants Discriminated Against in the Labour Market? A Case Study of Australia

Email address: raja.junankar@uws.edu.au

Keywords: Immigrants, Discrimination, unemployment, mobility.

JEL Classifications: J7, J61, J64, J31

Abstract:
This paper explores the issue of discrimination against Asian migrants in the Australian labour market using an unique panel data set, the Longitudinal Survey of Immigrants to Australia (LSIA). The paper begins with a discussion of discrimination in the labour market following on the classic papers by Phelps (1973), Arrow (1973) and Becker (1957) and the problems involved in some of the methods employed to estimate the extent of discrimination. Most of the earlier literature has focussed on the wage discrimination, however, our paper is based on assessing the extent of discrimination in finding employment which is a prerequisite to obtaining a wage. In our opinion, most of the wage discrimination studies underestimate the extent of discrimination since many members of the discriminated group do not find employment in the first place and hence have a zero wage. There are two aspects of discrimination we study: firstly, the probability of being unemployed is likely to be different for the discriminated group (given the same observable characteristics), and secondly, the transition probabilities of moving from unemployment to employment may be different for the discriminated group. Most of the earlier Australian research has focussed on differences between English speaking migrants and non-English speaking background migrants (NESB migrants) which unfortunately does not distinguish between European migrants from (say) Holland from the Vietnamese migrants. In our study we focus on discrimination against people of colour, in particular Asian migrants relative to other migrants. We are obviously aware of the problems involved in ascribing all the differences between Asian migrants and other migrants to discrimination although we try to control for most of the variables that are likely to affect labour market success. The next section of the paper provides a description of the LSIA data and the following section provides some descriptive statistics about labour market outcomes. The next section provides some econometric estimates using probit estimation. Our results suggest that there is discrimination against Asian migrants. A final section provides conclusions and suggestions for future work.

PDF file of paper: junankar.pdf

Session: Labor Economics

Time: Sunday, 8 July, 8am - 9:30am

Room: D