The Mystery of Discrimination in Latin America
In this paper we focus on a particular family of studies, namely, wage gaps decompositions. Numerous efforts have focused on documenting earnings differentials between females and males, indigenous and nonindigenous people, or Afro-descendants and whites. As the pieces of the literature that we survey in this section show, comparisons of hourly labor earnings (wages or self-employment income) suggest the existence of notorious gaps. However, non-indigenous (or male) workers exhibit human capital characteristics that are, on average, more desirable than those of indigenous (or female) workers. Examples of those characteristics include education, labor market experience, and field of specialization. To attribute the whole earnings gap to the existence of labor market discrimination would therefore be misleading. At least a component of the gap can be attributed to differences in observable human capital characteristics that the labor market rewards and, hence, is not attributable to the existence of discrimination. Blinder and Oaxaca were the first to explore this avenue of research, in which the profession has been able to identify, to some extent, the magnitude of this component
Volume (Year): Volume 8 Number 2 (2008)
Issue (Month): Spring 2008 (January)
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