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Decomposition of Differences in Distribution under Sample Selection and the Gender Wage Gap

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  • Santiago Pereda-Fern'andez

Abstract

I address the decomposition of the differences between the distribution of outcomes of two groups when individuals self-select themselves into participation. I differentiate between the decomposition for participants and the entire population, highlighting how the primitive components of the model affect each of the distributions of outcomes. Additionally, I introduce two ancillary decompositions that help uncover the sources of differences in the distribution of unobservables and participation between the two groups. The estimation is done using existing quantile regression methods, for which I show how to perform uniformly valid inference. I illustrate these methods by revisiting the gender wage gap, finding that changes in female participation and self-selection have been the main drivers for reducing the gap.

Suggested Citation

  • Santiago Pereda-Fern'andez, 2022. "Decomposition of Differences in Distribution under Sample Selection and the Gender Wage Gap," Papers 2204.00551, arXiv.org, revised May 2023.
    • Handle: RePEc:arx:papers:2204.00551
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    References listed on IDEAS

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    1. Thomas Bauer & Silja Göhlmann & Mathias Sinning, 2007. "Gender differences in smoking behavior," Health Economics, John Wiley & Sons, Ltd., vol. 16(9), pages 895-909, September.
    2. Bjorklund, Anders & Moffitt, Robert, 1987. "The Estimation of Wage Gains and Welfare Gains in Self-selection," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 42-49, February.
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