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Decomposing wage discrimination in Germany and Austria with counterfactual densities

  • Thomas Grandner


    (Vienna University of Economics and Business)

  • Dieter Gstach


    (Vienna University of Economics and Business)

Registered author(s):

    Using income and other individual data from EU-SILC for Germany and Austria, we analyze wage discrimination for three break-ups: gender, sector of employment, and country of origin. Using the method of Machado and Mata [2005] the discrimination over the whole range of the wage distribution is estimated. Significance of results is checked via confidence interval estimates along the lines of Melly [2006]. To narrow down the extent of discrimination both basic decomposition possibilities are compared. The economies of Germany and Austria appear structurally very similar. Especially the institutional setting of the labor markets seem to be closely comparable. One would, therefore, expect to find similar levels and structures of wage discrimination. Our findings deviate from this conjecture significantly.

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    Paper provided by Vienna University of Economics and Business, Department of Economics in its series Department of Economics Working Papers with number wuwp145.

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    Date of creation: Aug 2012
    Date of revision:
    Handle: RePEc:wiw:wiwwuw:wuwp145
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