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The impact of segregation on wage inequality: a look at recruitment and pay policies at the firm level

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Abstract

Wage dispersion within firms has increased, whilst segregation of workers according to their schooling level has also increased, as some firms "specialise" in workers with a high level of education and other "specialise" in workers with low level of education. This study analyses the interaction between the demand for education by firms and the wage in the Portuguese economy. A bivariate regression is implemented in wich the joint decision of the wage and education of the workers to be recruited is modelled. Some of the conclusions of the single-equation wage model are inverted, because that model captures a mixture of the firm's recruitment policy and the firm's wage policy. This is the case of the returns to experience and seniority. It is also observed that the increase in wage discrimination against women is more pronounced than captured by traditional uniequational model. The same occurs with the wage premium for education.

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Bibliographic Info

Paper provided by Núcleo de Investigação em Microeconomia Aplicada (NIMA), Universidade do Minho in its series NIMA Working Papers with number 8.

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Length: 26 pages
Date of creation: Jan 2001
Date of revision:
Handle: RePEc:nim:nimawp:8/2001

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Keywords: recruitment; segregation; wages; inequality; simultaneous equations;

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Cited by:
  1. Ana Rute Cardoso & Priscila Ferreira, 2009. "The dynamics of job creation and destruction for university graduates: why a rising unemployment rate can be misleading," Applied Economics, Taylor & Francis Journals, vol. 41(19), pages 2513-2521.
  2. Cardoso, Ana Rute & Portugal, Pedro, 2001. "Disentangling the Minimum Wage Puzzle: An Analysis of Job Accessions and Separations from a Longitudinal Matched Employer-Employee Data Set," CEPR Discussion Papers 2844, C.E.P.R. Discussion Papers.
  3. Anabela Botelho, 2001. "Strategic behavior at trial-The production, reporting, and evaluation of complex evidence," NIMA Working Papers 14, Núcleo de Investigação em Microeconomia Aplicada (NIMA), Universidade do Minho.
  4. Hartog, Joop & Zorlu, Aslan, 2002. "The Effect of Immigration on Wages in Three European Countries," IZA Discussion Papers 642, Institute for the Study of Labor (IZA).
  5. Anabela Botelho & Lígia Pinto, 2003. "Students' expectations of the economic returns to college education Results of a controlled experiment," NIMA Working Papers 27, Núcleo de Investigação em Microeconomia Aplicada (NIMA), Universidade do Minho.
  6. Elvira Lima & Teresa J. Esquerdo, 2003. "The economic costs of alcohol misuse in Portugal," NIMA Working Papers 24, Núcleo de Investigação em Microeconomia Aplicada (NIMA), Universidade do Minho.
  7. Paulo Guimaraes, 2001. "The state of Portuguese research in economics: an anlysis based on publications in international journals," NIMA Working Papers 15, Núcleo de Investigação em Microeconomia Aplicada (NIMA), Universidade do Minho.
  8. Elvira Lima & David K. Whynes, 2003. "Finance and performance of Portuguese hospitals," NIMA Working Papers 20, Núcleo de Investigação em Microeconomia Aplicada (NIMA), Universidade do Minho.
  9. Ligia Costa Pinto & Glenn Harrison, 2000. "Multilateral negotiations over climate change policy," NIMA Working Papers 1, Núcleo de Investigação em Microeconomia Aplicada (NIMA), Universidade do Minho.
  10. Anabela Botelho & Ligia Costa Pinto, 2001. "Hypothetical, real, and predicted real willingness to pay in open-ended surveys: experimental results," NIMA Working Papers 12, Núcleo de Investigação em Microeconomia Aplicada (NIMA), Universidade do Minho.
  11. Joao Cerejeira da Silva, 2002. "Identification of the Portuguese industrial districts," NIMA Working Papers 17, Núcleo de Investigação em Microeconomia Aplicada (NIMA), Universidade do Minho.
  12. Anabela Botelho & Ligia Costa Pinto & Miguel Portela & Antonio Silva, 2001. "The determinants of success in university entrance," NIMA Working Papers 13, Núcleo de Investigação em Microeconomia Aplicada (NIMA), Universidade do Minho.

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