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Matching as a Tool to Decompose Wage Gaps

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Hugo Ñopo (Inter-American Development Bank)

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Abstract

This paper presents a methodology that uses matching comparisons to explain gender wage differences. The approach emphasizes gender differences in the supports of the distributions of observable characteristics and provides insights into the distribution of unexplained gender pay differences. This nonparametric alternative to the Blinder-Oaxaca (BO) decomposition does not require the estimation of earnings equations and divides the gap into four additive elements. Two of these are analogous to the elements of the BO decomposition (but computed only over the common support of the distributions of characteristics), while the other two account for differences in the supports. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.

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File URL: http://www.mitpressjournals.org/doi/pdfplus/10.1162/rest.90.2.290
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Article provided by MIT Press in its journal The Review of Economics and Statistics.

Volume (Year): 90 (2008)
Issue (Month): 2 (03)
Pages: 290-299
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Handle: RePEc:tpr:restat:v:90:y:2008:i:2:p:290-299

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Jenkins, Stephen P., 1994. "Earnings discrimination measurement : A distributional approach," Journal of Econometrics, Elsevier, vol. 61(1), pages 81-102, March. [Downloadable!] (restricted)
  2. Blau, Francine D & Kahn, Lawrence M, 1996. "International Differences in Male Wage Inequality: Institutions versus Market Forces," Journal of Political Economy, University of Chicago Press, vol. 104(4), pages 791-836, August. [Downloadable!] (restricted)
    Other versions:
  3. Jörgen Hansen & Roger Wahlberg, 1999. "Endogenous Schooling and the Distribution of the Gender Wage Gap," IZA Discussion Papers 78, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  4. Heckman, James J & Smith, Jeffrey A, 1995. "Assessing the Case for Social Experiments," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 85-110, Spring. [Downloadable!] (restricted)
  5. François Bourguignon & Francisco H.G. Ferreira & Phillipe G. Leite, 2002. "Beyond Oaxaca-Blinder: accounting for differences in household income distributions across countries," Textos para discussão 452, Department of Economics PUC-Rio (Brazil). [Downloadable!]
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  6. LaLonde, Robert J, 1986. "Evaluating the Econometric Evaluations of Training Programs with Experimental Data," American Economic Review, American Economic Association, vol. 76(4), pages 604-20, September. [Downloadable!] (restricted)
  7. Jeffrey Smith & Petra Todd, 2003. "Does Matching Overcome Lalonde's Critique of Nonexperimental Estimators?," University of Western Ontario, CIBC Human Capital and Productivity Project Working Papers 20035, University of Western Ontario, CIBC Human Capital and Productivity Project. [Downloadable!]
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  8. Donald, Stephen G & Green, David A & Paarsch, Harry J, 2000. "Differences in Wage Distributions between Canada and the United States: An Application of a Flexible Estimator of Distribution Functions in the Presence of Covariates," Review of Economic Studies, Blackwell Publishing, vol. 67(4), pages 609-33, October.
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  10. Sageeta Pratap & Erwan Quintin, 2002. "Are Labor Markets Segmented in Argentina? A Semiparametric Approach," Working Papers 0202, Centro de Investigacion Economica, ITAM. [Downloadable!]
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  11. Ricardo Mora, 2008. "A nonparametric decomposition of the Mexican American average wage gap," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 23(4), pages 463-485. [Downloadable!]
  12. Ruthanne Deutsch & Andrew Morrison & Hugo Nopo & Claudia Piras, 2005. "Working Within Confines: Occupational Segregation By Sex For Three Latin American Countries," Icfai University Journal of Applied Economics, Icfai Press, vol. 0(3), pages 50-59, May.
  13. Dehejia, R.H. & Wahba, S., 1998. "Propensity Score Matching Methods for Non-Experimental Causal Studies," Discussion Papers 1998_02, Columbia University, Department of Economics.
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  14. Jaime Saavedra-Chanduví & Máximo Torero, 2000. "Labor Market Reforms and Their Impact on Formal Labor Demand and Job Market Turnover: The Case of Peru," RES Working Papers 3095, Inter-American Development Bank, Research Department. [Downloadable!]
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  17. James J. Heckman & Lance J. Lochner & Petra E. Todd, 2003. "Fifty Years of Mincer Earnings Regressions," NBER Working Papers 9732, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  18. Meyer, Bruce D, 1995. "Natural and Quasi-experiments in Economics," Journal of Business & Economic Statistics, American Statistical Association, vol. 13(2), pages 151-61, April.
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  19. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October. [Downloadable!] (restricted)
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  20. Oaxaca, Ronald L. & Ransom, Michael R., 1994. "On discrimination and the decomposition of wage differentials," Journal of Econometrics, Elsevier, vol. 61(1), pages 5-21, March. [Downloadable!] (restricted)
  21. Joshua D. Angrist, 1998. "Estimating the Labor Market Impact of Voluntary Military Service Using Social Security Data on Military Applicants," Econometrica, Econometric Society, vol. 66(2), pages 249-288, March.
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  22. Alberto Abadie & Guido W. Imbens, 2002. "Simple and Bias-Corrected Matching Estimators for Average Treatment Effects," NBER Technical Working Papers 0283, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Bernd Görzig & Martin Gornig & Axel Werwatz, 2007. "Produktvielfalt und Produktivität der IKT-Produzenten:Eine Analyse unter Nutzung verbundener amtlicher Unternehmensdaten," AStA Wirtschafts- und Sozialstatistisches Archiv, Springer, vol. 1(2), pages 145-161, October. [Downloadable!] (restricted)
  2. Dragana Djurdjevic & Sergiy Radyakin, 2005. "Decomposition of the Gender Wage Gap Using Matching: an Application for Switzerland," Darmstadt Discussion Papers in Economics 155, Institut für Volkswirtschaftslehre (Department of Economics), Technische Universität Darmstadt (Darmstadt University of Technology). [Downloadable!]
    Other versions:
  3. Bernd Görzig & Martin Gornig & Axel Werwatz, 2006. "East Germany’s Wage Gap: A non-parametric decomposition based on establishment characteristics," SFB 649 Discussion Papers SFB649DP2006-044, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany. [Downloadable!]
    Other versions:
  4. Hirsch, Boris & König, Marion & Möller, Joachim, 2009. "Is There a Gap in the Gap? Regional Differences in the Gender Pay Gap," IZA Discussion Papers 4231, Institute for the Study of Labor (IZA). [Downloadable!]
  5. Sebastian Calonico & Hugo Ñopo, 2008. "Segregación de genero en el trabajo y diferenciales de salario: Evidencia de las zonas urbanas de Mexico 1994-2004," RES Working Papers 4580, Inter-American Development Bank, Research Department. [Downloadable!]
  6. Stepán Jurajda & Teodora Paligorova, 2006. "Female Managers and their Wages in Central Europe," IZA Discussion Papers 2303, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  7. H Gravelle & A Risa Hole, 2008. "Measuring and testing for gender discrimination in professions: the case of English family doctors," Discussion Papers 08/27, Department of Economics, University of York. [Downloadable!]
  8. Wagner, Joachim, 2004. "What a Difference a Y Makes: Female and Male Nascent Entrepreneurs in Germany," IZA Discussion Papers 1134, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  9. BERND GÖRZIG & MARTIN GORNIG & AXEL WERWATZ, 2005. "Explaining Eastern Germany's Wage Gap: The Impact of Structural Change," Post-Communist Economies, Taylor and Francis Journals, vol. 17(4), pages 449-464, December. [Downloadable!] (restricted)
  10. repec:ese:iserwp: is not listed on IDEAS
  11. Sebastian Calonico & Hugo Ñopo, 2008. "Gender Segregation in the Workplace and Wage Gaps: Evidence from Urban Mexico 1994-2004," RES Working Papers 4579, Inter-American Development Bank, Research Department. [Downloadable!]
  12. Van Kerm, Philippe, 2009. "Generalized measures of wage differentials," IRISS Working Paper Series 2009-08, IRISS at CEPS/INSTEAD. [Downloadable!]
  13. Lourdes Gallardo & Hugo Nopo, 2009. "Ethnic and Gender Wage Gaps in Ecuador," RES Working Papers 4625, Inter-American Development Bank, Research Department. [Downloadable!]
  14. Hugo Ñopo, 2007. "An Extension of the Blinder-Oaxaca Decomposition to a Continuum of Comparison Groups," IZA Discussion Papers 2921, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  15. Bernd Görzig & Martin Gornig & Axel Werwatz, 2006. "Firm Specific Wage Spread in Germany - Decomposition of regional differences in inter firm wage dispersion," SFB 649 Discussion Papers SFB649DP2006-045, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany. [Downloadable!]
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