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

51 Pages Posted: 29 Dec 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. 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: C24, J31

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). CEPR Discussion Paper No. 4705. Available at SSRN: https://ssrn.com/abstract=641202

Richard W. Blundell

UCL ( email )

Department of Economics
Gower Street
London, WC1E 6BT
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HOME PAGE: http://www.ucl.ac.uk/~uctp39a/

IFS

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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 (Contact Author)

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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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

Yale University ( email )

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United States
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Yale University - Cowles Foundation ( email )

Box 208281
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Institute for Fiscal Studies (IFS) ( email )

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United Kingdom

National Bureau of Economic Research (NBER) ( email )

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United States

Centre for Economic Policy Research (CEPR)

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United Kingdom

IZA Institute of Labor Economics

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Bonn, D-53072
Germany

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