IDEAS home Printed from https://ideas.repec.org/a/ucp/jlabec/v15y1997i3p555-66.html
   My bibliography  Save this article

Decomposing Wage Residuals: Unmeasured Skill or Statistical Artifact?

Author

Listed:
  • Suen, Wing

Abstract

The decomposition of wage residuals into standard deviation and percentile ranks can be misleading because the two measures are not necessarily independent. With rising wage inequality, the mean percentile rank of low-wage groups will rise simply because more dispersed distributions have thicker tails. This interpretation is consistent with the observed stability of gender and racial wage gaps. In contrast, the unmeasured skill interpretation of wage residuals would predict widening wage gaps in the face of rising wage inequality, unless one posits an increase in the level of unobserved skill for women and blacks. Copyright 1997 by University of Chicago Press.

Suggested Citation

  • Suen, Wing, 1997. "Decomposing Wage Residuals: Unmeasured Skill or Statistical Artifact?," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages 555-566, July.
  • Handle: RePEc:ucp:jlabec:v:15:y:1997:i:3:p:555-66
    DOI: 10.1086/209872
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1086/209872
    File Function: full text
    Download Restriction: Access to full text is restricted to subscribers. See http://www.journals.uchicago.edu/JOLE for details.

    File URL: https://libkey.io/10.1086/209872?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Blau, Francine D & Kahn, Lawrence M, 1992. "The Gender Earnings Gap: Learning from International Comparisons," American Economic Review, American Economic Association, vol. 82(2), pages 533-538, May.
    2. 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.
    3. Claudia Goldin & Robert A. Margo, 1992. "The Great Compression: The Wage Structure in the United States at Mid-Century," The Quarterly Journal of Economics, Oxford University Press, vol. 107(1), pages 1-34.
    4. Goldin, Claudia D. & Margo, Robert, 1992. "The Great Compression: The Wage Structure in the United States at Mid- Century," Scholarly Articles 30703979, Harvard University Department of Economics.
    5. Finis Welch, 1969. "Linear Synthesis of Skill Distribution," Journal of Human Resources, University of Wisconsin Press, vol. 4(3), pages 311-327.
    6. Sherwin Rosen, 2005. "Substitution And Division Of Labour," World Scientific Book Chapters,in: An Inframarginal Approach To Trade Theory, chapter 3, pages 29-51 World Scientific Publishing Co. Pte. Ltd..
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Janet Currie & Ann Harrison, 2022. "Sharing the Costs: The Impact of Trade Reform on Capital and Labor in Morocco," World Scientific Book Chapters, in: Globalization, Firms, and Workers, chapter 2, pages 15-42, World Scientific Publishing Co. Pte. Ltd..
    2. Gruber, Jonathan, 1997. "The Incidence of Payroll Taxation: Evidence from Chile," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages 72-101, July.
    3. Revenga, Ana, 1997. "Employment and Wage Effects of Trade Liberalization: The Case of Mexican Manufacturing," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages 20-43, July.
    4. Bell, Linda A, 1997. "The Impact of Minimum Wages in Mexico and Colombia," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages 102-135, July.
    5. MacIsaac, Donna & Rama, Martin, 1997. "Determinants of Hourly Earnings in Ecuador: The Role of Labor Market Regulations," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages 136-165, July.
    6. Verdugo, G. & Fraisse, H. & Horny, G., 2012. "Changes In Wage Inequality In France: The Impact Of Composition Effects (in French)," Working papers 370, Banque de France.
    7. Robert A. Margo, 1993. "Explaining Black-White Wage Convergence, 1940-1950: The Role of the Great Compression," NBER Historical Working Papers 0044, National Bureau of Economic Research, Inc.
    8. David H. Autor & Lawrence F. Katz & Alan B. Krueger, 1998. "Computing Inequality: Have Computers Changed the Labor Market?," The Quarterly Journal of Economics, Oxford University Press, vol. 113(4), pages 1169-1213.
    9. Joseph Deutsch & Jacques Silber, 2007. "Earnings Functions and the Measurement of the Determinants of Wage Dispersion: Extending Oaxaca’s Approach," Economics Working Paper Archive wp_521, Levy Economics Institute.
    10. Bailey, Martha J. & Collins, William J., 2006. "The Wage Gains of African-American Women in the 1940s," The Journal of Economic History, Cambridge University Press, vol. 66(3), pages 737-777, September.
    11. Frydman, Carola & Molloy, Raven, 2012. "Pay Cuts for the Boss: Executive Compensation in the 1940s," The Journal of Economic History, Cambridge University Press, vol. 72(1), pages 225-251, March.
    12. Polachek, Solomon W., 2008. "Earnings Over the Life Cycle: The Mincer Earnings Function and Its Applications," Foundations and Trends(R) in Microeconomics, now publishers, vol. 4(3), pages 165-272, April.
    13. Robert A. Margo & T. Aldrich Finegan, 1995. "Changes in the Distribution of Wages, 1940-1950: The Public vs. the Private Sector," NBER Working Papers 5389, National Bureau of Economic Research, Inc.
    14. Titan Alon, 2018. "Earning More by Doing Less: Human Capital Specialization and the College Wage Premium," 2018 Meeting Papers 497, Society for Economic Dynamics.
    15. Kutuk, Yasin, 2022. "Inequality convergence: A world-systems theory approach," Structural Change and Economic Dynamics, Elsevier, vol. 63(C), pages 150-165.
    16. Nakabayashi, Masaki, 2011. "Schooling, employer learning, and internal labor market effect: Wage dynamics and human capital investment in the Japanese steel industry, 1930-1960s," MPRA Paper 30597, University Library of Munich, Germany.
    17. Alison L. Booth, 2006. "The Glass Ceiling in Europe: Why Are Women Doing Badly in the Labour Market?," CEPR Discussion Papers 542, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    18. Patricia Crifo & Etienne Lehmann, 2001. "Why the Kuznets Curve Will Always Reverse," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00150324, HAL.
    19. Leora Friedberg, 2003. "The Impact of Technological Change on Older Workers: Evidence from Data on Computer Use," ILR Review, Cornell University, ILR School, vol. 56(3), pages 511-529, April.
    20. Shinhye Chang & Rangan Gupta & Stephen M. Miller, 2018. "Causality Between Per Capita Real GDP and Income Inequality in the U.S.: Evidence from a Wavelet Analysis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 135(1), pages 269-289, January.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ucp:jlabec:v:15:y:1997:i:3:p:555-66. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Journals Division (email available below). General contact details of provider: https://www.journals.uchicago.edu/JOLE .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.