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Income Distribution and Labour Market Discrimination: A Case Study of Namibia

  • Ekström, Erika

    (The Research Institute of Industrial Economics)

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    This thesis contains two studies. The first study investigates the income distribution among Namibian households. The second study examines the differences in earnings between males and females in the Namibian labour market. In both studies we use the 1993/1994 Namibia Household Income and Expenditure Survey. The aim of the first study is to investigate what socio-economic variables that affect the Namibian income distribution. To measure this we use the Gini coefficient. To investigate the extent to which total income inequality is due to within-group inequality or between-group inequality we use both Theilo's (1967) entropy index T and Theil's second measure L. Income inequality is much more pronounced in the Central/southern region than in the North/north-east region. The within-group inequality seems to be the principal determinant of total inequality. Education and main source of income are important variables in determining degrees of between-group inequality. We find that Namibia still suffers from a skewed income distribution. The aim of the second study is to examine the differences in earnings between males and females in manufacturing, service and public sector. The estimated earnings differences are decomposed into endowment and discrimination components using techniques by Oaxaca (1973) and Oaxaca and Ransom (1994). Comparing Heckman's (1979)two-stage estimation procedure with ordinary least square estimates we find that accounting for selection does not affect the endowment component, but do affect the discrimination component. We also find that females have a productivity advantage over the males, which reduces the gross wage differential.

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    Paper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 502.

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    Length: 75 pages
    Date of creation: 30 May 1998
    Date of revision:
    Handle: RePEc:hhs:iuiwop:0502
    Contact details of provider: Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden
    Phone: +46 8 665 4500
    Fax: +46 8 665 4599
    Web page: http://www.ifn.se/
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    1. Coulter, Fiona A E & Cowell, Frank A & Jenkins, Stephen P, 1992. "Equivalence Scale Relativities and the Extent of Inequality and Poverty," Economic Journal, Royal Economic Society, vol. 102(414), pages 1067-82, September.
    2. Cotton, Jeremiah, 1988. "On the Decomposition of Wage Differentials," The Review of Economics and Statistics, MIT Press, vol. 70(2), pages 236-43, May.
    3. 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.
    4. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-38, May.
    5. Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-61, January.
    6. Ronald Oaxaca, 1971. "Male-Female Wage Differentials in Urban Labor Markets," Working Papers 396, Princeton University, Department of Economics, Industrial Relations Section..
    7. Ferreira, Luisa, 1996. "Poverty and inequality during structural adjustment in rural Tanzania," Policy Research Working Paper Series 1641, The World Bank.
    8. Leibbrandt, M.V. & Woolard, C.D. & Woolard, I.D., 1996. "The Contribution of Income Components to Income Inequality in South Africa. A Decomposable Gini Analysis," Papers 125a, World Bank - Living Standards Measurement.
    9. Fields, Gary S., 1994. "Data for measuring poverty and inequality changes in the developing countries," Journal of Development Economics, Elsevier, vol. 44(1), pages 87-102, June.
    10. Halvorsen, Robert & Palmquist, Raymond, 1980. "The Interpretation of Dummy Variables in Semilogarithmic Equations," American Economic Review, American Economic Association, vol. 70(3), pages 474-75, June.
    11. Datta, Gautam & Meerman, Jacob, 1980. "Household Income or Household Income Per Capita in Welfare Comparisons," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 26(4), pages 401-18, December.
    12. Reimers, Cordelia W, 1983. "Labor Market Discrimination against Hispanic and Black Men," The Review of Economics and Statistics, MIT Press, vol. 65(4), pages 570-79, November.
    13. de Beyer, J & Knight, J B, 1989. "The Role of Occupation in the Determination of Wages," Oxford Economic Papers, Oxford University Press, vol. 41(3), pages 595-618, July.
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