Wage discrimination and occupational segregation of foreign male workers in Germany

We analyze wage discrimination against foreign male workers in Germany with respect to different nationality groups and focused on its interaction with occupational segregation. We found evidence of strong occupational segregation, which we mainly attribute to institutional factors but also to different endowments with human capital. For the measurement of wage discrimination itself we applied a tobit estimation procedure to the wage equation and carried out the usual Blinder/Oaxaca decomposition in the second step. We found a slight discrimination against all foreign male workers together, but considerably greater discrimination for some nationality groups such as East Europeans and persons from the Middle and Far East. The additional consideration of occupational segregation did not affect these results much. However, by far most 'of the wage differentials between Germans and foreign nationality groups could be attributed to different endowments with human capital.