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Changes in the distribution of male and female wages accounting for employment composition using bounds

Author

Listed:
  • Richard Blundell

    (Institute for Fiscal Studies and University College London)

  • Amanda Gosling

    (Institute for Fiscal Studies and University of Kent)

  • Hidehiko Ichimura

    (Institute for Fiscal Studies and University of Arizona, University of Tokyo)

  • Costas Meghir

    (Institute for Fiscal Studies and Yale University)

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.

Suggested Citation

  • Richard Blundell & Amanda Gosling & Hidehiko Ichimura & Costas Meghir, 2004. "Changes in the distribution of male and female wages accounting for employment composition using bounds," IFS Working Papers W04/25, Institute for Fiscal Studies.
    • Handle: RePEc:ifs:ifsewp:04/25
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models; Threshold Regression Models

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