Estimating Labour Market Discrimination with Selectivity Corrected Wage Equations: Methodological Considerations and an Illustration from Israel
This paper presents a modified and improved methodology for the decomposition of wage differentials between two groups of workers into an endowment component and a discrimination component. The standard decomposition technique does not take into account different probabilities of entering the profession under discussion. To incorporate this type of segregation into the wage differential decompositions, two statistical methodologies are merged: the Oaxaca methodology and the Heckman selectivity bias correction procedure. Using information derived from the entrance equations, the decomposition procedure is then modified, in order to take into account the contribution of segregation to the endowments and the discrimination components. It appears that there is more than one way to do it. The proposed methodology is applied to the analysis of wages of professionals in the Israeli labour market. Comparisons are made between the two genders and between Westerners and Easterners. Our results show that discrimination plays a more important role in explaining gender wage differentials than in explaining ethnic wage gaps and that selectivity corrected decompositions are quite capable of yielding very different conclusions than those based on the standard decompositions.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
|Date of creation:||Jun 1998|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
|Order Information:|| Email: |
When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:1915. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()The email address of this maintainer does not seem to be valid anymore. Please ask to update the entry or send us the correct address
If references are entirely missing, you can add them using this form.