Comments and Questions

Thanking the referee for the valuable comments, I am pleased to respond in detail to the observations, taking each point in turn. I welcome more comments indicated to improve ours article. Thanks also to the editor to facilitate the discussion. (1). The referee identified wordiness in the language, which we have tried to overcome, but still there would be a feel of such issues, which we assume would be due to the technicality used in the paper for decomposition analysis. (2). the referee further suggests using the Chow test for checking if pooling is appropriate. We take the stand that decomposition techniques require the two groups to be identified a priori. Out selection of the models section is desired only to describe what models would be better to capture the effects of human capital across the two groups, whether separately or pooled models would be suitable. The use of information criteria is deems to select the good of models. The discussion follows the lines taken in (Hunt, 2008) and others. (3). Our modelling strategy is expected to be self-explanatory and relies on standard tools which takes standard hypothesis from the literature in Labour Economics. It is assumed that standard definitions of the hypothesis should have been skipped as the main objective of the paper was to capture the differentials across the immigrants and natives in our case, and only relevant human capital determinants are included which explain their contributions in terms of increasing or decreasing the wage gap. (4) In introduction, a new paragraph has been added to summarise the labour market conditions in Malaysia.