This paper examines changes in the distribution of wages using bounds to allow for the impact of nonrandom selection into work. We show that worst case bounds can be informative. However, because employment rates in the United Kingdom 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 educational differentials, and increases in the relative wages of women.
Find the working paper here.
Figure: Interquartile range of log wages
Authors
CPP Co-Director
Richard is Co-Director of the Centre for the Microeconomic Analysis of Public Policy (CPP) and Senior Research Fellow at IFS.
Amanda Gosling
Research Associate University of Arizona, University of Tokyo
Hidehiko is a Professor of Economics at the Eller College of Management, University of Arizona and a Research Associate at the IFS.
Research Fellow Yale University
Costas is a Research Fellow of the IFS and a Professor of Economics at Yale University and a Visiting Professor at University College London.
Journal article details
- DOI
- 10.1111/j.1468-0262.2006.00750.x
- Publisher
- Blackwell Publishing
- Issue
- March 2007
Suggested citation
Blundell, R et al. (2007). 'Changes in the distribution of male and female wages accounting for employment composition using bounds' (2007)
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