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Bounding Estimates of Wage Discrimination

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  • J.G. Hirschberg
  • D.J. Slottje

Abstract

The Blinder Oaxaca decomposition method for defining wage differentials (generally referred to as discrimination) from the wage equations of two groups has had a wide degree of application. However, the decomposition measures can vary dramatically depending on the definition of the non-discriminatory wage chosen for comparison. This paper uses a form of extreme bounds analysis to define the limits on the measure of discrimination that can be obtained from these decompositions. A simple application is presented to demonstrate the use of the bootstrap to define the distributions of the discrimination measure.

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Bibliographic Info

Paper provided by The University of Melbourne in its series Department of Economics - Working Papers Series with number 879.

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Length: 26 pages
Date of creation: 2003
Date of revision:
Handle: RePEc:mlb:wpaper:879

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Keywords: Extreme Bounds Analysis; Discrimination; Bootstrap;

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References

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  1. McAleer, Michael & Pagan, Adrian, 1985. "What Will Take the Con Out of Econometrics?," CEPR Discussion Papers 39, C.E.P.R. Discussion Papers.
  2. Cotton, Jeremiah, 1988. "On the Decomposition of Wage Differentials," The Review of Economics and Statistics, MIT Press, vol. 70(2), pages 236-43, May.
  3. Borland, Jeff & Hirschberg, Joe & Lye, Jenny, 1998. "Earnings of Public Sector and Private Sector Employees in Australia: Is There a Difference?," The Economic Record, The Economic Society of Australia, vol. 74(224), pages 36-53, March.
  4. 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.).
  5. Levine, Ross & Renelt, David, 1992. "A Sensitivity Analysis of Cross-Country Growth Regressions," American Economic Review, American Economic Association, vol. 82(4), pages 942-63, September.
  6. Randall K. Filer, 1993. "The Usefulness of Predicted Values for Prior Work Experience in Analyzing Labor Market Outcomes for Women," Journal of Human Resources, University of Wisconsin Press, vol. 28(3), pages 519-537.
  7. Leamer, Edward E, 1983. "Let's Take the Con Out of Econometrics," American Economic Review, American Economic Association, vol. 73(1), pages 31-43, March.
  8. Temple, Jonathan, 2000. "Growth Regressions and What the Textbooks Don't Tell You," Bulletin of Economic Research, Wiley Blackwell, vol. 52(3), pages 181-205, July.
  9. 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.
  10. Jacques Silber & Michal Weber, 1999. "Labour market discrimination: are there significant differences between the various decomposition procedures?," Applied Economics, Taylor & Francis Journals, vol. 31(3), pages 359-365.
  11. 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.
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Cited by:
  1. Martin Fournier, 2005. "Exploiting information from path dependency in Oaxaca-Blinder decomposition procedures," Applied Economics Letters, Taylor & Francis Journals, vol. 12(11), pages 669-672.

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