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Changes in the distribution of male and female wages accounting for employment composition using bounds

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Author Info

  • Richard Blundell

    ()
    (Institute for Fiscal Studies and University College London)

  • Amanda Gosling

    ()
    (Institute for Fiscal Studies and University of Kent)

  • Hidehiko Ichimura

    ()
    (Institute for Fiscal Studies and University of Tokyo)

  • Costas Meghir

    (Institute for Fiscal Studies and Yale University)

Abstract

This paper examines changes in the distribution of wages using bounds to allow for the impact of non-random selection into work. We show that bounds constructed without any economic or statistical assumptions can be informative. However, since employment rates in the UK are often low they are not informative about changes in educational or gender wage differentials. Thus we explore ways to tighten these bounds using restrictions motivated from economic theory. With these assumptions we find convincing evidence of an increase in inequality within education groups, changes in the "return" to education and increases in the relative wages of women.

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Bibliographic Info

Paper provided by Institute for Fiscal Studies in its series IFS Working Papers with number W04/25.

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Length: 49 pp.
Date of creation: Sep 2004
Date of revision:
Handle: RePEc:ifs:ifsewp:04/25

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