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Wage Differentials in the 1990s in Israel: Endowments, Discrimination, and Selectivity

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Author Info
Neuman, Shoshana () (Bar-Ilan University, CEPR and IZA Bonn)
Oaxaca, Ronald L. (University of Arizona and IZA Bonn)

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Abstract

The purpose of this paper is to investigate wage structures of professional workers in the Israeli labor market, using data from the most recent 1995 Census and correcting for selectivity at the stage of entrance into the occupation. The sample of professionals is decomposed into several subsamples: men and women and within each gender a distinction is made between Easterners (origination from Asian/African countries) and Westerners (from European/American countries of origin). Comparisons by gender and ethnicity can then be made. Characteristics (endowments) and wage structures of the four groups are presented. Wage equations include the Inverse of Mill's Ratio as a regressor to correct for selection into the professional occupations. Wage differences are then examined and decomposed into 3 components: Endowments (human capital), discrimination and selectivity. Following the methodology presented in Neuman and Oaxaca (2004), four alternative decompositions are suggested and discussed.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1362.

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Length: 37 pages
Date of creation: Oct 2004
Date of revision:
Handle: RePEc:iza:izadps:dp1362

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Related research
Keywords: endowments; discrimination; selectivity; gender; ethnicity; Israel;

Other versions of this item:

Find related papers by JEL classification:
J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities and Races; Non-labor Discrimination
J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations
J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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References listed on IDEAS
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  2. Polachek, Solomon William, 1975. "Differences in Expected Post-school Investments as a Determinant of Market Wage Differentials," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 16(2), pages 451-70, June. [Downloadable!] (restricted)
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  4. Gregory M. Duncan & Duane E. Leigh, 1980. "Wage determination in the union and non-union sectors: A sample selectivity approach," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 34(1), pages 24-34, October.
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  6. repec:fth:prinin:439 is not listed on IDEAS
  7. Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-61, January. [Downloadable!] (restricted)
  8. Chiswick, Barry R & Miller, Paul W, 1995. "The Endogeneity between Language and Earnings: International Analyses," Journal of Labor Economics, University of Chicago Press, vol. 13(2), pages 246-88, April. [Downloadable!] (restricted)
  9. repec:bep:evoice:4:2007:4:5 is not listed on IDEAS
    Other versions:
  10. Reimers, Cordelia W, 1983. "Labor Market Discrimination against Hispanic and Black Men," The Review of Economics and Statistics, MIT Press, vol. 65(4), pages 570-79, November. [Downloadable!] (restricted)
  11. Shoshana Neuman & Ronald L. Oaxaca, 2003. "Gender vs Ethnic Wage Differentials Among Professionals: Evidence from Israel," Annales d'Economie et de Statistique, ADRES, issue 71-72, pages 12, Juillet-D. [Downloadable!]
  12. Macpherson, David A & Hirsch, Barry T, 1995. "Wages and Gender Composition: Why Do Women's Jobs Pay Less?," Journal of Labor Economics, University of Chicago Press, vol. 13(3), pages 426-71, July. [Downloadable!] (restricted)
  13. 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)
    Other versions:
  14. 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)
  15. Neuman, Shoshana & Silber, Jacques G, 1996. "Wage Discrimination across Ethnic Groups: Evidence from Israel," Economic Inquiry, Oxford University Press, vol. 34(4), pages 648-61, October.
  16. Shoshana Neuman & Ronald Oaxaca, 2004. "Wage Decompositions with Selectivity-Corrected Wage Equations: A Methodological Note," Journal of Economic Inequality, Springer, vol. 2(1), pages 3-10, April. [Downloadable!] (restricted)
  17. Harry A. Krashinsky, 2000. "Do Marital Status and Computer Usage Really Change the Wage Structure? Evidence from a Sample of Twins," Working Papers 818, Princeton University, Department of Economics, Industrial Relations Section.. [Downloadable!]
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  19. David Neumark, 1987. "Employers' discriminatory behavior and the estimation of wage discrimination," Special Studies Papers 227, Board of Governors of the Federal Reserve System (U.S.).
  20. Barbara R. Bergmann, 1974. "Occupational Segregation, Wages and Profits When Employers Discriminate by Race or Sex," Eastern Economic Journal, Eastern Economic Association, vol. 1(2), pages 103-110, April. [Downloadable!]
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