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Labour market discrimination: are there significant differences between the various decomposition procedures?

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  • Jacques Silber
  • Michal Weber

Abstract

Economists have usually called the proportion of the average wage gap between two groups which could not be explained by individual characteristics 'discrimination'. Recently, several theories have suggested that labour market discrimination, on the one hand, lowers the wages of the 'minority' group, and on the other, leads to higher pay for the 'majority' group. In a recent survey of the various methods used to decompose the overall wage differential between two groups, Oaxaca and Ransom compared five approaches in the contexts of race and gender discrimination. This paper checks whether there are significant differences between the various decomposition procedures which have appeared in the literature. The tests are based on bootstrap techniques.

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  • Jacques Silber & Michal Weber, 1999. "Labour market discrimination: are there significant differences between the various decomposition procedures?," Applied Economics, Taylor & Francis Journals, vol. 31(3), pages 359-365.
    • Handle: RePEc:taf:applec:v:31:y:1999:i:3:p:359-365
    DOI: 10.1080/000368499324345
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    References listed on IDEAS

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    1. Bergmann, Barbara R, 1971. "The Effect on White Incomes of Discrimination in Employment," Journal of Political Economy, University of Chicago Press, vol. 79(2), pages 294-313, March-Apr.
    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. Reimers, Cordelia W, 1983. "Labor Market Discrimination against Hispanic and Black Men," The Review of Economics and Statistics, MIT Press, vol. 65(4), pages 570-579, November.
    4. David Neumark, 1988. "Employers' Discriminatory Behavior and the Estimation of Wage Discrimination," Journal of Human Resources, University of Wisconsin Press, vol. 23(3), pages 279-295.
    5. Oaxaca, Ronald L. & Ransom, Michael R., 1994. "On discrimination and the decomposition of wage differentials," Journal of Econometrics, Elsevier, vol. 61(1), pages 5-21, March.
    6. Cotton, Jeremiah, 1988. "On the Decomposition of Wage Differentials," The Review of Economics and Statistics, MIT Press, vol. 70(2), pages 236-243, May.
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    Cited by:

    1. Weichselbaumer, Doris & Winter-Ebmer, Rudolf, 2003. "Rhetoric in Economic Research: The Case of Gender Wage Differentials," Economics Series 144, Institute for Advanced Studies.
    2. Elvin Afandi & Majid Kermani, 2014. "Bridging the Gender Gap in Entrepreneurship: Evidence from Europe," William Davidson Institute Working Papers Series wp1074, William Davidson Institute at the University of Michigan.
    3. Ben Jann, 2008. "A Stata implementation of the Blinder-Oaxaca decomposition," ETH Zurich Sociology Working Papers 5, ETH Zurich, Chair of Sociology, revised 14 May 2008.
    4. Doris Weichselbaumer & Rudolf Winter-Ebmer, 2007. "The effects of competition and equal treatment laws on gender wage differentials [‘Models of job discrimination’]," Economic Policy, CEPR;CES;MSH, vol. 22(50), pages 236-287.
    5. Mohamed Jellal & Christophe Nordman & Francois-Charles Wolff, 2008. "Evidence on the glass ceiling effect in France using matched worker-firm data," Applied Economics, Taylor & Francis Journals, vol. 40(24), pages 3233-3250.
    6. Doris Weichselbaumer & Rudolf Winter‐Ebmer, 2005. "A Meta‐Analysis of the International Gender Wage Gap," Journal of Economic Surveys, Wiley Blackwell, vol. 19(3), pages 479-511, July.
    7. P. N. Junankar & Satya Paul & Wahida Yasmeen, 2010. "Are Asian Migrants Discriminated Against In The Labor Market? A Case Study Of Australia," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 55(04), pages 619-646.
    8. Chen, Yiu Por (Vincent) & Zhang, Yuan, 2018. "A decomposition method on employment and wage discrimination and its application in urban China (2002–2013)," World Development, Elsevier, vol. 110(C), pages 1-12.
    9. Bernd Fitzenberger & Karsten Kohn & Qingwei Wang, 2011. "The erosion of union membership in Germany: determinants, densities, decompositions," Journal of Population Economics, Springer;European Society for Population Economics, vol. 24(1), pages 141-165, January.
    10. repec:dau:papers:123456789/4377 is not listed on IDEAS
    11. Furdas, Marina & Kohn, Karsten, 2010. "What's the Difference?! Gender, Personality, and the Propensity to Start a Business," IZA Discussion Papers 4778, Institute of Labor Economics (IZA).
    12. Joern Block & Karsten Kohn & Danny Miller & Katrin Ullrich, 2015. "Necessity entrepreneurship and competitive strategy," Small Business Economics, Springer, vol. 44(1), pages 37-54, January.
    13. Essama-Nssah, , B. & Bassol3, Leandre & Paul, Saumik, 2010. "Accounting for heterogeneity in growth incidence in Cameroon," Policy Research Working Paper Series 5464, The World Bank.
    14. Essama-Nssah, B. & Bassole, Leandre, 2010. "A counterfactual analysis of the poverty impact of economic growth in Cameroon," Policy Research Working Paper Series 5249, The World Bank.
    15. Joseph G. Hirschberg & Daniel J. Slottje, 2004. "Bounding Estimates Of Wage Discrimination," Research in Labor Economics, in: Accounting for Worker Well-Being, pages 215-233, Emerald Group Publishing Limited.
    16. Amélia Bastos & Graça Leão Fernandes & José Passos, 2004. "Estimation of Gender Wage Discrimination in the Portuguese Labour Market," Notas Económicas, Faculty of Economics, University of Coimbra, issue 19, pages 35-48, June.
    17. Thomas Couppié & Arnaud Dupray & Stéphanie Moullet, 2006. "Les salaires des hommes et femmes en début de vie active : des sources de disparité variables selon les professions," Post-Print hal-03498087, HAL.
    18. Nicole Schneeweis, 2011. "Educational institutions and the integration of migrants," Journal of Population Economics, Springer;European Society for Population Economics, vol. 24(4), pages 1281-1308, October.
    19. Yue Ma & Ying Chu Ng, 2008. "Bootstrapping statistical inferences of decomposition methods for gender earnings differentials," Applied Economics, Taylor & Francis Journals, vol. 40(12), pages 1583-1593.
    20. Heinze, Anja, 2010. "Beyond the mean gender wage gap: Decomposition of differences in wage distributions using quantile regression," ZEW Discussion Papers 10-043, ZEW - Leibniz Centre for European Economic Research.

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