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

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

Abstract

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.

Suggested Citation

  • Blundell, Richard & Meghir, Costas & Gosling, Amanda & Ichimura, Hidehiko, 2004. "Changes in the Distribution of Male and Female Wages Accounting for Employment Composition Using Bounds," CEPR Discussion Papers 4705, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:4705
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    More about this item

    Keywords

    Wage differentials; Selection models; Bounds;
    All these keywords.

    JEL classification:

    • C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models; Threshold Regression Models
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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