Ethnic discrimination amongst migrant workers : evidence from the construction industry in Singapore.

Abstract

Despite the myriad of laws and policies enacted to ensure that workers are treated fairly by their employers, wage differences across foreign workers in the Construction Industry still persist. This paper seeks to investigate the existence of wage differences among foreign workers in the Singapore Construction Industry, its prevailing type of discrimination and its corresponding magnitude. Using the Ordinary Least Square (OLS) method, we show that despite all workers possessing almost similar ability, Chinese workers on average earn S$7/hour while the Bangladeshi and Indian workers earn S$3/hour and S$3.50/hour respectively. Furthermore, wage gap across Chinese and non-Chinese workers worsen when firms hire more non-Chinese workers. Robustness checks involving a pooled OLS method also confirm the existence of wage differences. Given that meritocracy forms one of the governing principles in Singapore, the results obtained highlight huge policy implications for the Singapore Government to ensure a safe and fair working environment for workers, regardless of ethnicity.