Changes in Wage Structure in Mexico Going Beyond the Mean: An Analysis of Differences in Distribution, 1987-2008
University of Barcelona - Department of Econometrics
University of Barcelona - AQR; Institute for the Study of Labor (IZA)
Autonomous University of Barcelona - Department of Econometrics, Statistics and Spanish Economy
May 15, 2012
XREA Working Paper No. 2012-07
This paper conducts an empirical analysis of the relationship between wage inequality, employment structure, and returns to education in urban areas of Mexico during the past two decades (1987-2008). Applying Melly’s (2005) quantile regression based decomposition, we find that changes in wage inequality have been driven mainly by variations in educational wage premia. Additionally, we find that changes in employment structure, including occupation and firm size, have played a vital role. This evidence seems to suggest that the changes in wage inequality in urban Mexico cannot be interpreted in terms of a skill-biased change, but rather they are the result of an increasing demand for skills during that period.
Number of Pages in PDF File: 56
Keywords: wage inequality, quantile regressions, decomposition
JEL Classification: J31working papers series
Date posted: May 15, 2012
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