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Changes in the Distribution of Male and Female Wages Accounting for Employment Composition Using BoundsRichard W. BlundellUCL; IFS; Institute for the Study of Labor (IZA); Centre for Economic Policy Research (CEPR) Amanda GoslingUniversity of Essex - Department of Economics; Institute for Fiscal Studies (IFS); Centre for Economic Policy Research (CEPR) Hidehiko IchimuraUniversity College London - Department of Economics Costas MeghirYale University; Yale University - Cowles Foundation; Institute for Fiscal Studies (IFS); National Bureau of Economic Research (NBER); University College London; Centre for Economic Policy Research (CEPR); Institute for the Study of Labor (IZA) October 2004 IZA Discussion Paper No. 1350 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. 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.
Number of Pages in PDF File: 50 Keywords: wage differentials, selection models, bounds JEL Classification: J31, C24 working papers seriesDate posted: October 14, 2004Suggested CitationContact Information
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