Different Endowment or Remuneration? Exploring wage differentials in Switzerland Oscar Gonzalez ♦ , Rico Maggi ♦♠ , Jasmith Rosas ♣ * University of California, Berkeley * University of Lugano ♣ University of Applied Sciences, Lugano DRAFT December 2005 Abstract This paper analysis wage differentials in Switzerland with special focus on the wage differences among the region of Ticino and the other Swiss regions. We decompose the regional wage differentials in two components applying a method proposed by Blinder (1973) and Oaxaca (1973). The first component captures the wage differential due to differences in the characteristics of workers, and the second explains the differentials due to different returns on these characteristics. The results show that with respect to the region of Zurich half of the differential is due to each component, whereas the negative wage difference between Ticino and the other regions is mainly due to a different remuneration of given characteristics. JEL classification: J31, J32 ♠ Corresponding author: Università della Svizzera Italiana, Facoltà di Scienze Economiche, Via G. Buffi 13, 6904 Lugano . E-mail: Rico.Maggi@lu.unisi.ch 1