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On the Ranking Uncertainty of Labor Market Wage Gaps

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Author Info
William C. Horrace (University of Arizona)

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Abstract

This paper uses multiple comparison methods to perform inference on labor market wage gap estimates from a regression model of wage determination. The regression decomposes a sample of workers' wages into a human capital component and a gender specific component; the gender component is called the gender differential or wage gap and is sometimes interpreted as a measure of sexual discrimination. Using data on fourteen industry classifications (e.g. retail sales, agriculture), a new relative estimator of the wage gap is calculated for each industry. The industries are then ranked based on the magnitude of these estimators, and inference experiments are performed using "multiple comparisons with the best" and "multiple comparisons with a control". The inference indicates that differences in gender discrimination across industry classifications is statistically insignificant at the 95% confidence level and that previous studies which have failed to perform inference on gender wage gap order statistics may be misleading.

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File URL: http://129.3.20.41/eps/em/papers/0206/0206003.pdf
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Publisher Info
Paper provided by EconWPA in its series Econometrics with number 0206003.

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Length: 17 pages
Date of creation: 19 Jun 2002
Date of revision:
Handle: RePEc:wpa:wuwpem:0206003

Note: Type of Document - Acrobat PDF; prepared on IBM PC; to print on HP; pages: 17; figures: included. Multiple comparison inference techniques applied to labor amrket wage gap estimation
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Web page: http://129.3.20.41

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Related research
Keywords: Labor economics; discrimination; wage differentials; multiple comparisons with the best;

Other versions of this item:

Find related papers by JEL classification:
C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Hypothesis Testing
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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  1. William C. Horrace, 2002. "Selection Procedures for Order Statistics in Empirical Economic Studies," Econometrics 0206005, EconWPA. [Downloadable!]
  2. William C. Horrace & Beyza P. Ural & Jin Hwa Jung, 2006. "Inter-Industry Gender Wage Gaps by Knowledge Intensity: Discrimination and Technology in Korea," Center for Policy Research Working Papers 79, Center for Policy Research, Maxwell School, Syracuse University. [Downloadable!]
    Other versions:
  3. William C. Horrace & Joseph T. Marchand & Timothy M. Smeeding, 2005. "Ranking Inequality: Applications of Multivariate Subset Selection," Center for Policy Research Working Papers 70, Center for Policy Research, Maxwell School, Syracuse University. [Downloadable!]
    Other versions:
  4. Myeong-Su Yun, 2006. "Revisiting Inter-Industry Wage Differentials and the Gender Wage Gap: An Identification Problem," IZA Discussion Papers 2427, Institute for the Study of Labor (IZA). [Downloadable!]
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