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Decomposing the language pay gap among the indigenous ethnic minorities of Mexico: is it all down to observables?

Author

Listed:
  • Adriana Aguilar-Rodriguez

    () (Center for Research in Geospacial Information Science (CentroGeo) & PANEL, Mexico)

  • Alfonso Miranda

    () (Economics Division & PANEL, Centre for Economic Research and Teaching (CIDE), Mexico)

  • Yu Zhu

    () (Economic Studies, University of Dundee)

Abstract

Using the decomposition methods of Oaxaca and Choe (2016), we investigate the pay gap between indigenous language monolinguals (INL) and Spanish-indigenous-language bilinguals (BIL) among indigenous ethnic minorities in Mexico using the 10% sample of the Mexican Census 2000 and 2010. The decomposition fits linear models with municipal fixed effects for the case of males and correlated random effects Heckman sample selection models for the case of females (to account for potential sample selection bias). We find evidence of a positive return to bilingualism for males of 17% and of 42% for females. Over 60% of the pay gap is explained by differences in observable characteristics.

Suggested Citation

  • Adriana Aguilar-Rodriguez & Alfonso Miranda & Yu Zhu, 2018. "Decomposing the language pay gap among the indigenous ethnic minorities of Mexico: is it all down to observables?," Economics Bulletin, AccessEcon, vol. 38(2), pages 689-695.
  • Handle: RePEc:ebl:ecbull:eb-18-00123
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2018/Volume38/EB-18-V38-I2-P67.pdf
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    References listed on IDEAS

    as
    1. Chiswick, Barry R & Patrinos, Harry Anthony & Hurst, Michael E, 2000. "Indigenous Language Skills and the Labor Market in a Developing Economy: Bolivia," Economic Development and Cultural Change, University of Chicago Press, vol. 48(2), pages 349-367, January.
    2. 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.
    3. Wooldridge, Jeffrey M., 1995. "Selection corrections for panel data models under conditional mean independence assumptions," Journal of Econometrics, Elsevier, vol. 68(1), pages 115-132, July.
    4. Chiswick, Barry R. & Miller, Paul W., 2003. "The complementarity of language and other human capital: immigrant earnings in Canada," Economics of Education Review, Elsevier, vol. 22(5), pages 469-480, October.
    5. Alan S. Blinder, 1973. "Wage Discrimination: Reduced Form and Structural Estimates," Journal of Human Resources, University of Wisconsin Press, vol. 8(4), pages 436-455.
    6. Oaxaca, Ronald L. & Choe, Chung, 2016. "Wage Decompositions Using Panel Data Sample Selection Correction," IZA Discussion Papers 10157, Institute for the Study of Labor (IZA).
    7. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
    8. James J. Heckman & Thomas E. Macurdy, 1980. "A Life Cycle Model of Female Labour Supply," Review of Economic Studies, Oxford University Press, vol. 47(1), pages 47-74.
    9. Godoy, Ricardo & Reyes-Garcia, Victoria & Seyfried, Craig & Huanca, Tomas & Leonard, William R. & McDade, Thomas & Tanner, Susan & Vadez, Vincent, 2007. "Language skills and earnings: Evidence from a pre-industrial economy in the Bolivian Amazon," Economics of Education Review, Elsevier, vol. 26(3), pages 349-360, June.
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    More about this item

    Keywords

    indigenous language; wage gap; ethnic minorities; Mexico;

    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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