Changes in the Distribution of Male and Female Wages Accounting for Employment Composition Using Bounds
Richard W. Blundell
UCL; IFS; Institute for the Study of Labor (IZA); Centre for Economic Policy Research (CEPR)
University of Essex - Department of Economics; Institute for Fiscal Studies (IFS); Centre for Economic Policy Research (CEPR)
University College London - Department of Economics
Yale 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)
IZA Discussion Paper No. 1350
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, C24working papers series
Date posted: October 14, 2004
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