Sources of Earnings Differentials Among Migrants and Natives
In: The Pakistan development review: PDR, Band 37, Heft 4II, S. 939-953
The theory of human capital postulates that earnings of
different categories of workers, be they male or female, black or white,
unionised or non-unionised depend on the level of human capital
endowment of these individuals [Becker (1964) and Mineer (1974)].
Besides educational attainment and on-the-job experience, part of the
earnings differential, at lest in the short run, can also result from
market imperfections such as restrictions on factor mobility or other
artificial distortions. However, despite concerted efforts by public and
social institutions to remove social injustice, the automatic .long run
market clearance as envisaged by classical economists is not always
there. It is not uncommon to find workers with identical background and
skills receiving differentials treatment in terms of wages and other
rewards. This suggests that unobservable personal characteristics are
also positively valued at the market and that the market has a "taste"
for discrimination.! The theory of discrimination thus hypothesises that
differential wages ,can exit if market differentiates and treats
distinct categories of workers on the basis of race, gender or similar
categorisations [Becker (1957)].