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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 (Department of Economics, University College London and IFS)
Amanda Gosling (Department of Economics, Essex Univeristy, IFS and CEPR)
Hidehiko Ichimura (Faculty of Economics, University of Tokyo and RIETI)
Costas Meghir (Department of Economics, University College London, IFS and CEPR)

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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 worst case bounds 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 educational differentials and increases in the relative wages of women.

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Publisher Info
Paper provided by CIRJE, Faculty of Economics, University of Tokyo in its series CIRJE F-Series with number CIRJE-F-420.

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Length: 57pages
Date of creation: May 2006
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Handle: RePEc:tky:fseres:2006cf420

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