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

  • Blundell, Richard

    ()

    (University College London)

  • Gosling, Amanda

    ()

    (University of Kent)

  • Ichimura, Hidehiko

    ()

    (University of Tokyo)

  • Meghir, Costas

    ()

    (Yale University)

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. However, 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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File URL: http://ftp.iza.org/dp1350.pdf
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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1350.

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Length: 50 pages
Date of creation: Oct 2004
Date of revision:
Publication status: published in: Econometrica, 2007, 75(2), 323–363
Handle: RePEc:iza:izadps:dp1350
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  15. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
  16. 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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  19. Moshe Buchinsky, 1998. "The dynamics of changes in the female wage distribution in the USA: a quantile regression approach," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 13(1), pages 1-30.
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  23. Gronau, Reuben, 1974. "Wage Comparisons-A Selectivity Bias," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1119-43, Nov.-Dec..
  24. Blau, Francine D & Kahn, Lawrence M, 1997. "Swimming Upstream: Trends in the Gender Wage Differential in 1980s," Journal of Labor Economics, University of Chicago Press, vol. 15(1), pages 1-42, January.
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