Ethnic Disparities in the Graduate Labour Market

Abstract

This paper examines ethnic wage differentials for the entire population of workers who enrolled for the first time as students at Dutch universities (WO) and colleges (HBO) in 1996 using unique administrative panel data for the period 1996 to 2005 from the Dutch tertiary education system. The study breaks down wage differentials into two components: a component which can be explained by the observed characteristics and an unexplained component. The analysis provides new evidence for the magnitude and the origin of ethnic wage differentials by gender. In general, ethnic wage gap is larger for migrant women than migrant men and larger for Western and Caribbean migrants than for Mediterranean migrants. Ethnic minority workers appear to have larger wage surpluses which is almost entirely explained by their observed favourable characteristics. Most notably, Mediterranean female graduates have significantly positive wage discrimination, while Western female graduates seem to face a small wage penalty.