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Changes in the Distribution of Male and Female Wages Accounting for Employment Composition Using Bounds

  • Blundell, Richard William
  • Gosling, Amanda
  • Ichimura, Hidehiko
  • Meghir, Costas

This Paper examines changes in the distribution of wages using bounds to allow for the impact of non-random selection into work. We show that bounds constructed without any economic or statistical assumptions can be informative. Since employment rates in the UK are often low they are not informative about changes in educational or gender wage differentials. Thus we explore ways to tighten these bounds using restrictions motivated from economic theory. With these assumptions we find convincing evidence of an increase in inequality within education groups, changes in the ‘return’ to education and increases in the relative wages of women.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 4705.

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Date of creation: Oct 2004
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Handle: RePEc:cpr:ceprdp:4705
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  29. Richard Blundell & Howard Reed & Thomas M. Stoker, 2003. "Interpreting Aggregate Wage Growth: The Role of Labor Market Participation," American Economic Review, American Economic Association, vol. 93(4), pages 1114-1131, September.
  30. Ahn, Hyungtaik & Powell, James L., 1993. "Semiparametric estimation of censored selection models with a nonparametric selection mechanism," Journal of Econometrics, Elsevier, vol. 58(1-2), pages 3-29, July.
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