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

50 Pages Posted: 14 Oct 2004

See all articles by Richard W. Blundell

Richard W. Blundell

UCL; IFS; IZA Institute of Labor Economics; Centre for Economic Policy Research (CEPR)

Amanda Gosling

University of Essex - Department of Economics; Institute for Fiscal Studies (IFS); Centre for Economic Policy Research (CEPR)

Hidehiko Ichimura

Graduate School of Economics, University of Tokyo

Costas Meghir

Yale University; Yale University - Cowles Foundation; Institute for Fiscal Studies (IFS); National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Multiple version iconThere are 2 versions of this paper

Date Written: October 2004

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.

Keywords: wage differentials, selection models, bounds

JEL Classification: J31, C24

Suggested Citation

Blundell, Richard W. and Gosling, Amanda and Ichimura, Hidehiko and Meghir, Costas, Changes in the Distribution of Male and Female Wages Accounting for Employment Composition Using Bounds (October 2004). IZA Discussion Paper No. 1350. Available at SSRN: https://ssrn.com/abstract=605246

Richard W. Blundell

UCL ( email )

Department of Economics
Gower Street
London, WC1E 6BT
United Kingdom
+44 20 7504 5863 (Phone)
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HOME PAGE: http://www.ucl.ac.uk/~uctp39a/

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IZA Institute of Labor Economics

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Centre for Economic Policy Research (CEPR)

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Amanda Gosling

University of Essex - Department of Economics ( email )

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United Kingdom
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Institute for Fiscal Studies (IFS)

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United Kingdom

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Hidehiko Ichimura

Graduate School of Economics, University of Tokyo ( email )

7-3-1 Hongo Bunkyo-ku
Tokyo 113-0033
Japan

Costas Meghir (Contact Author)

Yale University ( email )

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New Haven, CT CT 06511
United States
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Yale University - Cowles Foundation ( email )

Box 208281
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United States

Institute for Fiscal Studies (IFS) ( email )

7 Ridgmount Street
London, WC1E 7AE
United Kingdom

National Bureau of Economic Research (NBER) ( email )

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Cambridge, MA 02138
United States

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

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Bonn, D-53072
Germany

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