Working paper in progress

Sur la base du rapport établi pour le Secrétariat d'Etat à l'économie (SECO), le document de travail  du Professeur Tobias Müller et de Roman Graf combine la décomposition des salaires avec un approche structurelle, afin de déterminer l'impact de la libre circulation des personnes sur les salaires des employé(e)s suisses.


 

The Effects of the
Free Movement of Persons
on the Distribution of Wages
in Switzerland

Tobias Müller and Roman Graf

Preliminary draft
November 2014

Abstract


This paper combines a wage decomposition method with a structural econometric model in order to determine to what extent the free movement of persons (FMP) can be made responsible for the observed changes in the wage structure of natives in Switzerland. First, we identify the changes in returns to observable and unobservable skills of natives between 2002 and 2010, using non parametric and parametric decomposition techniques. Second, we estimate a structural model of  the Swiss labor market in order to simulate the changes in returns to skills that would have been observed in the absence of the FMP. Third, we combine the two types of analyses and discuss whether the FMP can be considered as being a main cause of the increasing polarization of the Swiss wage distribution.

Keywords: Immigration; free movement of persons; wage distribution; de-
composition methods
JEL codes: F22, J31, J61.

∗ This paper builds on research funded by the Swiss State Secretariat for Economic Affairs
SECO (see Muller et al., 2013).

We thank Noé Asensio for excellent research assistance. Müller acknowledges support by the Swiss National Science Foundation (NCCR “On the Move”).

† Geneva School of Economics and Management, University of Geneva, 40 boulevard du Pont-d'Arve 1211 Geneva 4, Switzerland. Email: Tobias(dot)Mueller(at)unige(dot).ch

This paper builds on research funded by the Swiss State Secretariat for Economic Affairs



Müller Tobias, Asensio Noé et Graf Roman, Les effets de la libre circulation des personnes sur les salaires suisses, Laboratoire d’économie appliquée (LEA), Observatoire universitaire de l’emploi (OUE), 2013, Université de Genève.