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

ACCOUNTING ADULT MALE AGE CATEGORIES AGE GROUPS ANNUAL WAGE AVERAGE EXCHANGE RATE AVERAGE WAGE CALCULATION CALCULATIONS CARPENTERS CITIZEN CITIZENS CONSEQUENCES OF MIGRATION CONSUMER CONSUMPTION SMOOTHING CONTRIBUTION CONTRIBUTIONS COST OF TRAVEL COUNTRIES OF ORIGIN COUNTRY OF DESTINATION COUNTRY OF ORIGIN DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DIRECT COST DISCRIMINATION DISEQUILIBRIUM DRIVERS EARNING EARNINGS EARNINGS MEASURES ECONOMIC GROWTH ECONOMIC THEORY EMPLOYMENT EXCHANGE RATES EXPECTED WAGE FACTOR MARKETS FAMILY MEMBERS FEMALE WORKERS FINANCIAL INSTRUMENTS FORMAL SECTOR WAGE FORMS OF DISCRIMINATION FUNCTIONAL FORMS GDP GDP PER CAPITA GENDER DISCRIMINATION GLOBAL DEVELOPMENT GROSS WAGES HOUSEHOLD CONSUMPTION HUMAN CAPITAL IMMIGRANT IMMIGRANTS IMMIGRATION INCOME INCOME COUNTRIES INCOME INEQUALITY INCOME TAXES INCOMES INFORMAL SECTOR INTERNATIONAL BORDERS INTERNATIONAL PRICE JOBS LABOR COST LABOR COSTS LABOR INCOME LABOR MARKET LABOR MARKET DISCRIMINATION LABOR MARKETS LABOR MIGRATION LABOR MOBILITY LABORERS LARGE FIRMS LEVELS OF EDUCATION LIFETIME LOCAL CURRENCY LOTTERY LOW-INCOME LOW-INCOME COUNTRY LOW-INCOME FAMILIES MAINTENANCE COSTS MARGINAL PRODUCT MARGINAL PRODUCTS MARITAL STATUS MATH MEDICAL CARE MIGRANTS MIGRATION FLOWS MIGRATION POLICY MOVEMENTS OF PEOPLE NATIONAL POPULATION NUMBER OF WORKERS OCCUPATION OCCUPATIONS OFFICIAL LANGUAGE PERSONAL COMMUNICATION POLICY RESEARCH POLICY RESEARCH WORKING PAPER POOR HOUSEHOLDS POOR PEOPLE POVERTY REDUCTION PRECEDING SECTION PREVIOUS SECTION PRODUCTIVITIES PRODUCTIVITY PROGRESS PUBLIC GOOD PURCHASING POWER PURCHASING POWER PARITY RACIAL DISCRIMINATION REAL COST REAL WAGE REAL WAGES REFUGEE REFUGEES REMITTANCES REMUNERATION RESEARCH ASSISTANCE RESPECT RETURN MIGRATION RURAL RESIDENCE SALARIES SAVERS SAVINGS SAVINGS RATES SEX SOCIAL SECURITY SOURCES OF INCOME STATISTICAL ANALYSIS STOCKS TEMPORARY MIGRANTS TEMPORARY MIGRATION TEMPORARY WORKERS TOTAL COMPENSATION TOTAL WAGE TRANSPORTATION UNDERESTIMATES UNEMPLOYED UNPAID FAMILY WORKERS URBAN AREAS UTILITY FUNCTION WAGE WAGE DATA WAGE DIFFERENTIALS WAGE DISCRIMINATION WAGE DISTRIBUTION WAGE EFFECT WAGE GAIN WAGE GAINS WAGE GAP WAGE GAPS WAGE RATE WAGE RATES WAGES WOMAN WORK EXPERIENCE WORKER WORKFORCE WORTH
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World Bank, Washington, DC
Latin America & Caribbean | Africa | Bolivia | United States | Nigeria
2012-05-31T22:26:43Z | 2012-05-31T22:26:43Z | 2008-07

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.

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