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Bounding Estimates of Wage Discrimination

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  • J.G. Hirschberg
  • D.J. Slottje

Abstract

The Blinder Oaxaca decomposition method for defining wage differentials (generally referred to as discrimination) from the wage equations of two groups has had a wide degree of application. However, the decomposition measures can vary dramatically depending on the definition of the non-discriminatory wage chosen for comparison. This paper uses a form of extreme bounds analysis to define the limits on the measure of discrimination that can be obtained from these decompositions. A simple application is presented to demonstrate the use of the bootstrap to define the distributions of the discrimination measure.

Suggested Citation

  • J.G. Hirschberg & D.J. Slottje, 2003. "Bounding Estimates of Wage Discrimination," Department of Economics - Working Papers Series 879, The University of Melbourne.
    • Handle: RePEc:mlb:wpaper:879
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    References listed on IDEAS

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    1. Jacques Silber & Michal Weber, 1999. "Labour market discrimination: are there significant differences between the various decomposition procedures?," Applied Economics, Taylor & Francis Journals, vol. 31(3), pages 359-365.
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    3. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
    4. Jeff Borland & Joe Hirschberg & Jenny Lye, 1998. "Earnings of Public Sector and Private Sector Employees in Australia: Is There a Difference?," The Economic Record, The Economic Society of Australia, vol. 74(224), pages 36-53, March.
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    6. McAleer, Michael & Pagan, Adrian R & Volker, Paul A, 1985. "What Will Take the Con out of Econometrics?," American Economic Review, American Economic Association, vol. 75(3), pages 293-307, June.
    7. Levine, Ross & Renelt, David, 1992. "A Sensitivity Analysis of Cross-Country Growth Regressions," American Economic Review, American Economic Association, vol. 82(4), pages 942-963, September.
    8. Alan S. Blinder, 1973. "Wage Discrimination: Reduced Form and Structural Estimates," Journal of Human Resources, University of Wisconsin Press, vol. 8(4), pages 436-455.
    9. Cotton, Jeremiah, 1988. "On the Decomposition of Wage Differentials," The Review of Economics and Statistics, MIT Press, vol. 70(2), pages 236-243, May.
    10. Reimers, Cordelia W, 1983. "Labor Market Discrimination against Hispanic and Black Men," The Review of Economics and Statistics, MIT Press, vol. 65(4), pages 570-579, November.
    11. David Neumark, 1988. "Employers' Discriminatory Behavior and the Estimation of Wage Discrimination," Journal of Human Resources, University of Wisconsin Press, vol. 23(3), pages 279-295.
    12. Randall K. Filer, 1993. "The Usefulness of Predicted Values for Prior Work Experience in Analyzing Labor Market Outcomes for Women," Journal of Human Resources, University of Wisconsin Press, vol. 28(3), pages 519-537.
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    Cited by:

    1. Christopher Dougherty, 2005. "Why Are the Returns to Schooling Higher for Women than for Men?," Journal of Human Resources, University of Wisconsin Press, vol. 40(4), pages 969-988.
    2. Alejandra Villacis & Marcos Reis, 2015. "Analisis de la vulnerabilidad laboral y los determinantes del trabajo decente. El caso de Ecuador 2008-2011," Revista de Economía del Rosario, Universidad del Rosario, vol. 18(2), pages 157-185, December.
    3. Martin Fournier, 2005. "Exploiting information from path dependency in Oaxaca-Blinder decomposition procedures," Applied Economics Letters, Taylor & Francis Journals, vol. 12(11), pages 669-672.

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    More about this item

    Keywords

    Extreme Bounds Analysis; Discrimination; Bootstrap;
    All these keywords.

    JEL classification:

    • J7 - Labor and Demographic Economics - - Labor Discrimination
    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables

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