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Wage inequality in a developing country: decrease in minimum wage or increase in education returns

Author

Listed:
  • Xulia GonzÂlez

    (Departamento de Economi´a Aplicada, Fac. EconÕmicas, Universidad de Vigo. Lagoas Marcosende sn, Pontevedra, Spain.)

  • Daniel Miles

    (Departamento de Economi´a Aplicada, Fac. EconÕmicas, Universidad de Vigo. Lagoas Marcosende sn, Pontevedra, Spain.)

Abstract

In this paper we analyze the increase in wage inequality observed in the Uruguayan labour market during the last decade, by studying how the changes in minimum wage and returns to education affected the wage structure. Although in most developed countries a significant proportion of the increase in wage inequality is explained by a fall in the real minimum wage, this is not the case for the Uruguayan labour market. We observe that returns to education increased significantly, which could explain the increase of wage dispersion by its effects on the upper tail of the wage distribution. To derive these conclusions we follow a parametric and nonparametric quantile regression approach.

Suggested Citation

  • Xulia GonzÂlez & Daniel Miles, 2001. "Wage inequality in a developing country: decrease in minimum wage or increase in education returns," Empirical Economics, Springer, vol. 26(1), pages 135-148.
    • Handle: RePEc:spr:empeco:v:26:y:2001:i:1:p:135-148
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    Cited by:

    1. Sam Jones & Thomas Pave Sohnesen & Neda Trifkovic, 2023. "Educational expansion and shifting private returns to education: Evidence from Mozambique," Journal of International Development, John Wiley & Sons, Ltd., vol. 35(6), pages 1407-1428, August.
    2. Ghulam Sarwar & Muhammad Saeed Hashmi, 2014. "Returns to Education and Earning Inequality Nexus: A Micro-Econometric Analysis for Pakistan," Journal of Economics and Behavioral Studies, AMH International, vol. 6(1), pages 32-36.
    3. Azam, Mehtabul, 2012. "Changes in Wage Structure in Urban India, 1983–2004: A Quantile Regression Decomposition," World Development, Elsevier, vol. 40(6), pages 1135-1150.
    4. Daniel Miles, 2002. "Small sample behaviour of quantile estimators," Applied Economics Letters, Taylor & Francis Journals, vol. 9(14), pages 911-913.
    5. Lawrence Dacuycuy, 2006. "Explaining male wage inequality in the Philippines: non-parametric and semiparametric approaches," Applied Economics, Taylor & Francis Journals, vol. 38(21), pages 2497-2511.
    6. Walter Sosa Escudero & Javier Alejo & Leonardo Gasparini & Gabriel Montes Rojas, 2021. "A decomposition method to evaluate the "paradox of progress", with evidence for Argentina," Asociación Argentina de Economía Política: Working Papers 4523, Asociación Argentina de Economía Política.
    7. Fernando Borraz & Nicolás González-Pampillón, 2017. "Assessing the distributive effects of minimum wage," Review of Development Economics, Wiley Blackwell, vol. 21(4), pages 1081-1112, November.
    8. Claudia Tello & Raul Ramos & Manuel Artís, 2012. "“Changes in Wage Structure in Mexico Going Beyond the Mean: An Analysis of Differences in Distribution, 1987-2008”," AQR Working Papers 201211, University of Barcelona, Regional Quantitative Analysis Group, revised Mar 2013.
    9. Chris Herbst & Erdal Tekin, 2011. "Child care subsidies and childhood obesity," Review of Economics of the Household, Springer, vol. 9(3), pages 349-378, September.
    10. Panchanan Das, 2018. "Wage Gap and Employment Status in Indian Labour Market - Quantile Based Counterfactual Analysis," World Journal of Applied Economics, WERI-World Economic Research Institute, vol. 4(2), pages 117-134, December.
    11. Siang, Liew & Noor, Zulridah, 2015. "The Impact of Training on the Conditional Wage Distribution in Selected Service Subsectors in Malaysia," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 49(1), pages 37-48.
    12. Wiji Arulampalam & Alison Booth & Mark Bryan, 2010. "Are there asymmetries in the effects of training on the conditional male wage distribution?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 23(1), pages 251-272, January.
    13. Branko Milanovic, 2006. "Inequality and Determinants of Earnings in Malaysia, 1984–1997," Asian Economic Journal, East Asian Economic Association, vol. 20(2), pages 191-216, June.
    14. Pallab Kumar Ghosh & Jae Yoon Lee, 2016. "Decomposition of Changes in Korean Wage Inequality, 1998–2007," Journal of Labor Research, Springer, vol. 37(1), pages 1-28, March.
    15. José Mata & José A. F. Machado, 2005. "Counterfactual decomposition of changes in wage distributions using quantile regression," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(4), pages 445-465.
    16. Fernando Borraz & Nicolás Gonzalez Pampillón, 2011. "Assessing the Distributive Impact of More than Doubling the Minimum Wage: The Case of Uruguay," Documentos de Trabajo (working papers) 1711, Department of Economics - dECON.
    17. Francisca Lívia S. Menezes & Ronaldo A. Arraes & Andrei G. Simonass, 2014. "Earning Differentials By Occupational Categories And Discrimination: Gender, Race And Regions," Anais do XLI Encontro Nacional de Economia [Proceedings of the 41st Brazilian Economics Meeting] 214, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    18. Fernando Borraz & Nicolás González, 2009. "Minimum Wage: Empirical evidence for Uruguay," Documentos de trabajo 2009003, Banco Central del Uruguay.
    19. Pallab Ghosh & Jae Lee, 2016. "Decomposition of Changes in Korean Wage Inequality, 1998–2007," Journal of Labor Research, Springer, vol. 37(1), pages 1-28, March.
    20. Lamichhane, Kamal & Watanabe, Takayuki, 2015. "The Effect of Disability and Gender on Returns to the Investment in Education: A Case from Metro Manilla of the Philippines," Working Papers 103, JICA Research Institute.
    21. Giovagnoli, Paula Ines & Fiszbein, Ariel & Patrinos, Harry Anthony, 2005. "Estimating the returns to education in Argentina : 1992-2002," Policy Research Working Paper Series 3715, The World Bank.
    22. Sandra Rodrí­guez, 2014. "Wage inequality in Uruguay: Technological change impact on occupational tasks," Documentos de Trabajo (working papers) 14-15, Instituto de Economía - IECON.

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