| Summary: | The foreign-born population has generally a lower employment rate and a higher unemployment rate compared to the native-born population in the OECD countries. Today, 26 out of 34 OECD countries have a statutory minimum wage, while the minimum wage in the other countries is differentiated between the sectors and determined by the labour market parties. In the countries with a statutory minimum wage, there is a great variation between the minimum wage share of the median wage, which is believed to have an effect on employment and unemployment. The aim of this thesis is to study whether an increase of the quotient between the median wage and the minimum wage increases the foreign-born population employment and decreases the foreign-born unemployment. In order to control this effect in all OECD countries despite wage formation system, the wage dispersion measure 50/10-ratio is used since it measures the ratio of the median wage and the ten percent of the population with the lowest wages. This study runs over 11 years, during the period 2001 to 2011, and includes all OECD countries except for Japan and Korea. The method used is quantitative regression analysis, Ordinary Least Squares (OLS). The results show that an increase of the wage dispersion in the bottom half of the wage distribution has no effect on the foreign-born population employment rate but has a negative effect on the foreign-born population unemployment rate in both relative and absolute terms. On the other hand, it is not possible to see any effect of an increased quotient between the median wage and the minimum wage on foreign-born population employment or unemployment over time if only OECD countries with a statutory minimum wage is analysed.
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