Page 230 - Contributed Paper Session (CPS) - Volume 1

CPS1284 Rabeh M.
socioeconomic status, living conditions, and quality of life. This
marginalization often linked to exclusion and violence. In this article, we
examine the structure and the level of the income inequality including an
empirical decomposition of the refugee non-refugee disparities. More
specifically, we will investigate how the disparities in the distribution of
household features and in the returns to these features contribute to this
inequality. This would undoubtedly shed more light on the role and
effectiveness of current development and integration policies conducted by
the authorities and others institutions in favor of the refugees.

2. Methodology
Using the basic Oaxaca and Blinder decomposition technique (Blinder,
1973; Oaxaca, 1973), wage difference equations will be estimated for refugee
workers and non-refugee workers separately. To explain, suppose the mean
log wage function for each group (2 groups) is described by the subsequent
equation:
( | ) = (1)

where denotes the logarithmic real hourly wages, is the vector of general
(i.e. age, gender, education, marital status, experience, and residence) and
labor market characteristics (i.e. occupation, sector of activity) (including the
constant term), β is the vector of coefficients and G denotes the group of
workers: refugee and non-refugees in labor market. Then the OLS estimate of
assesses the impact of on the conditional or unconditional mean of for

group G. It is noteworthy that the Oaxaca–Blinder decomposition has been
widely used to decompose the mean wage gap between two opposite groups
(initially between male and female groups) into a composition effect explained
by differences in productivity features and an unexplained wage structure
effect due to different returns to covariates. Accordingly, the mean log wage
gap between non-refugee () and refugee () workers can be written as
̅
follows:
− ̅ = ( − ̅ ) + ̅( − ̅) (2)
̅
̂
̂
̂
̅
̂
̅
̅

Where is the reference wage structure, and ( − ̅ ) is the composition
̂
̅
̅
̂

effect and ̅( − ̅) represents the wage structure effect
̂
̂
̂

(discrimination effect).
Notwithstanding its usefulness in explaining whether differences in wages
between different population sub-groups are due to variations in
characteristics between them or alternatively due to the wage structure, the
Oaxaca-Blinder decomposition method is recently criticized for considering
only the decomposition of the mean wage differences, yielding an incomplete
representation of the inequality sources. Accordingly, other conventional
methods have extended the decomposition beyond the mean and allow the
investigation of the entire distribution, yet they all share the same weaknesses
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