The Immigrant Wage Gap in Austria

For a couple of years the subject of income (in)equality has moved into the focus of numerously scientific articles. Most empiric studies confirm, that income disparities have grown considerably in the past decades in industrial states. Many newspaper articles are as well dealing with the widening of income gaps, as for example a contribution of the Economist: Over the past quarter century, those at the top have done better than those in the middle, who in turn have outpaced those at the bottom. The gains of productivity growth have been increasingly skewed. (The Economist: Inequality in America - The rich, the poor and the growing gap between them, 25.07.2006). The results of several empiric studies support these statements (cp. Piketty/Saez 2004, Bach/Corneo/Steiner 2007). Besides, it seems hardly surprising that this development particularly affects migrants, since this layer of society could often not enforce its economic interests. The intention of this thesis is to determine the causes of the persistently high income differences between migrants and Austrians and to fathom the reasons for different payment. The income gap will be split up in its single components by means of the decomposition model which was developed by Blinder (1973) and Oaxaca (1973). Starting point for the earnings model is a regression on a row of variables from the data set EU-SILC (European Statistics on Income and Living Conditions) of 2005. Typical characteristics for the determination of wage levels are amongst others the level of education, labor market experience, gender, firm size, industrial sector, etc. In this paper, theoretical perceptions of different economic schools are underlying the econometric calculations. Beside the popular approach of Gary S. Becker (cp. Becker 1971), a historical approach to the origin of economic discrimination is introduced, concerning the central question under which economic and social conditions inequality generally may appear.