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More on Identification on Detailed Wage Decompositions

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Author Info
Javier Gardeazabal () (Universidad del País Vasco / The University of the Basque Country)
Arantza Ugidos () (Universidad del País Vasco / The University of the Basque Country)

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Abstract

Wage decompositions are often used to decompose wage differentials of two demographic groups into differences in characteristics and differences in returns to those characteristics. The later part is used as an estimate of the degree of discrimination. A problem with this approach is that the contributions of individual dummy variables to the wage decomposition are not identified. This note proposes a simple solution to the identification problem. The solution is illustrated with an empirical application to Spanish labor market data.

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Paper provided by University of the Basque Country - Department of Foundations of Economic Analysis II in its series DFAEII Working Papers with number 200217.

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Date of creation: 02 Oct 2003
Date of revision: 04 May 2006
Publication status: Forthcoming in Review of Economics and Statistics
Handle: RePEc:ehu:dfaeii:200217

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Postal: Dpto. de Fundamentos del Análisis Económico II, Facultad de CC. Económicas y Empresariales, Universidad del País Vasco, Avda. Lehendakari Aguirre 83, 48015 Bilbao, Spain
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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. Judith Fields & Edward N. Wolff, 1995. "Interindustry wage differentials and the gender wage gap," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 49(1), pages 105-120, October.
  2. 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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  3. 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)
  4. William C. Horrace & Ronald L. Oaxaca, 2001. "Inter-industry wage differentials and the gender wage gap: An identification problem," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 54(3), pages 611-618, April.
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(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. Laia Castany, 2008. "The Role of Firm Size in Training Provision Decisions: evidence from Spain," Economics of Education Working Paper Series 0028, University of Zurich, Institute for Strategy and Business Economics (ISU). [Downloadable!]
  2. Hipólito Simón & Esteban Sanromá & Raúl Ramos, 2008. "Labour segregation and immigrant and native-born wage distributions in Spain: an analysis using matched employer–employee data," Spanish Economic Review, Springer, vol. 10(2), pages 135-168, June. [Downloadable!] (restricted)
  3. Ben Jann, 2008. "A Stata implementation of the Blinder-Oaxaca decomposition," ETH Zurich Sociology Working Papers 5, ETH Zurich, Chair of Sociology, revised 14 May 2008. [Downloadable!]
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  4. Laia Castany & Enrique Lopez-Bazo & Rosina Moreno, 2007. "Decomposing differences in total factor productivity across firm size," IREA Working Papers 200705, University of Barcelona, Research Institute of Applied Economics, revised Mar 2007. [Downloadable!]
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  5. Madden, D, 2008. "Gender Differences in Mental Well- Being: A Decomposition Analysis," Health, Econometrics and Data Group (HEDG) Working Papers 08/08, HEDG, c/o Department of Economics, University of York. [Downloadable!]
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  6. Laia Castany, 2008. "The Role of Firm Size in Training Provision Decisions: evidence from Spain," IREA Working Papers 200808, University of Barcelona, Research Institute of Applied Economics, revised Jun 2008. [Downloadable!]
  7. Carlos Gradín, 2007. "Why Is Poverty So High Among Afro-Brazilians? A Decomposition Analysis of the Racial Poverty Gap," IZA Discussion Papers 2809, Institute for the Study of Labor (IZA). [Downloadable!]
  8. Ira N. Gang & Robert C. Stuart & Myeong-Su Yun, 2006. "Wage Growth and Inequality Change During Rapid Economic Transition," Departmental Working Papers 200631, Rutgers University, Department of Economics. [Downloadable!]
  9. Myeong-Su Yun, 2006. "Revisiting Inter-Industry Wage Differentials and the Gender Wage Gap: An Identification Problem," IZA Discussion Papers 2427, Institute for the Study of Labor (IZA). [Downloadable!]
  10. Myeong-Su Yun, 2005. "Normalized Equation and Decomposition Analysis: Computation and Inference," IZA Discussion Papers 1822, Institute for the Study of Labor (IZA). [Downloadable!]
  11. Madden, D, 2008. "An Analysis of Mental Stress in Ireland, 1994-2000," Health, Econometrics and Data Group (HEDG) Working Papers 08/07, HEDG, c/o Department of Economics, University of York. [Downloadable!]
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