Twenty Years of Wage Inequality in Latin America

2019 ◽  
Author(s):  
Julian Messina ◽  
Joana Silva
Keyword(s):  
Latin America ◽  
Wage Inequality ◽  
High School Graduates ◽  
Wage Structure ◽  
Rapid Expansion ◽  
Wage Distribution ◽  
Evidence Based ◽  
Sharp Reduction ◽  
Market Experience ◽  
Skill Groups

Abstract This article documents an inverse U-shape in the evolution of wage inequality in Latin America since 1995, with a sharp reduction starting in 2002. The Gini coefficient of wages increased from 42 to 44 between 1995 and 2002 and declined to 39 by 2015. Between 2002 and 2015, the 90/10 log hourly earnings ratio decreased by 26 percent. The decline since 2002 was characterized by rising wages across the board, but especially at the bottom of the wage distribution in each country. Triggered by a rapid expansion of educational attainment, the wages of college and high school graduates fell relative to the wages of workers with only primary education. The premium for labor market experience also fell significantly. However, the compression of wages was not entirely driven by changes in the wage structure across skill groups. Two-thirds of the decline in the variance of wages took place within skill groups. Changes in the sectoral, occupational, and formal/informal composition of jobs matter for the process of reduction in inequality, but they do not fully account for the fall in within-skill variance. Evidence based on longitudinal matched employer-employee administrative data suggests that an important driver was falling wage dispersion across firms.

scholarly journals Expanding higher education and wage inequality in Chile

2020 ◽  
Vol 47 (4) ◽  
pp. 877-889
Author(s):  
Yoshimichi Murakami ◽  
Tomokazu Nomura
Keyword(s):  
Higher Education ◽  
Wage Inequality ◽  
Household Survey ◽  
Wage Structure ◽  
Wage Distribution ◽  
Structure Effect ◽  
Composition Effect ◽  
Content Type ◽  
Subsequent Decrease ◽  
Using Data

PurposeThis study aims to analyse the contribution of the expansion and diversification of higher education to Chile's increase in wage inequality from 1992 to 2000 and its subsequent decrease from 2000 to 2013.Design/methodology/approachThe wage equation for each year is estimated using data from the national household survey, Encuesta de Caracterización Socioeconómica Nacional (CASEN). Using the method proposed by Firpo et al. (2009), the evolution of wage changes is decomposed into composition and wage structure effects of each explanatory variable at different points of the wage distribution.FindingsThe results show that the positive composition effect of higher education, derived from the increasing share of both workers with university degrees and those with vocational degrees, is substantially larger at the upper quantiles and exceeds the negative wage structure effect, thereby contributing to increasing wage inequality from 1992 to 2000. By contrast, the negative wage structure effect of higher education, primarily derived from the decreasing return to university degrees, is substantially larger at the upper quantiles and exceeds the positive composition effect, thereby contributing to decreasing wage inequality from 2000 to 2013.Originality/valueThis study contributes to the literature by showing that the expansion of higher education increased inequality in the 1990s and decreased it in the 2000s while the increasing supply of workers with vocational degrees decreased wage premiums for university degrees in the latter period.

Changes in the Turkish Wage Structure in the EU Accession Process

2016 ◽  
pp. 187-208
Author(s):  
Nursel Aydiner-Avsar ◽  
M. Burak Onemli
Keyword(s):  
Wage Inequality ◽  
College Education ◽  
Wage Structure ◽  
Wage Distribution ◽  
Eu Accession ◽  
Job Status ◽  
Related Factors ◽  
Accession Process ◽  
Major Factors ◽  
The Eu

This chapter aims to analyze the evolution of Turkish wage structure following the introduction of new labor law in 2003 in the EU accession process. The authors first present a descriptive picture of the changes in wage inequality between 2003 and 2013. They then conduct an econometric analysis of the relative importance of individual, job- and workplace-related factors on wages across the wage distribution to understand what drives this outcome. It is found that wage inequality decreased from 2003 to 2007, and increased during the global economic crisis. Increased returns to college education, skilled white collar jobs as well as returns to construction sector stand out as the major factors increasing wage inequality. Though to a lesser extent, increased returns to blue-collar jobs, formal job status and reduced returns to employment in large firms are factors reducing wage inequality in Turkey in the post-2003 era.

scholarly journals The Contribution of the Minimum Wage to US Wage Inequality over Three Decades: A Reassessment

2016 ◽  
Vol 8 (1) ◽  
pp. 58-99 ◽  
Author(s):  
David H. Autor ◽  
Alan Manning ◽  
Christopher L. Smith
Keyword(s):  
Minimum Wage ◽  
Wage Inequality ◽  
Wage Structure ◽  
Earnings Inequality ◽  
Minimum Wages ◽  
Wage Distribution ◽  
Prior Work ◽  
Lower Tail ◽  
Structure Changes ◽  
Wage Effects

We reassess the effect of minimum wages on US earnings inequality using additional decades of data and an IV strategy that addresses potential biases in prior work. We find that the minimum wage reduces inequality in the lower tail of the wage distribution, though by substantially less than previous estimates, suggesting that rising lower tail inequality after 1980 primarily reflects underlying wage structure changes rather than an unmasking of latent inequality. These wage effects extend to percentiles where the minimum is nominally nonbinding, implying spillovers. We are unable to reject that these spillovers are due to reporting artifacts, however. (JEL J22, J31, J38, K31)

scholarly journals The Assignment of Workers to Tasks, Wage Distribution, and Technical Change: A Critical Review

2008 ◽  
pp. 12
Author(s):  
Arnaud Dupuy
Keyword(s):  
Production Function ◽  
Wage Inequality ◽  
Technical Change ◽  
Critical Review ◽  
Wage Structure ◽  
Wage Distribution ◽  
Wage Distributions ◽  
General Equilibrium Effect ◽  
Assignment Models ◽  
Equilibrium Effect

This article reviews the literature on two-sided atomless assignment models of workers to tasks. Using simple parametric examples, the fundamental differences between the comparative-advantage and the scale-of-operations models are illustrated. Holding the distributions of abilities and tasks and the production function of worker-task pairs constant, the two principles are shown to produce different wage distributions and wage inequality. These models are useful to evaluate the general equilibrium effect of technical change on the wage structure. In all models, Skill Biased Technical Change that impacts the production function of worker-task pairs leads to rising wage inequality.

Discrimination against refugees in the Palestinian labor market

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Rabeh Morrar ◽  
Fernando Rios-Avila
Keyword(s):  
Labor Market ◽  
Wage Inequality ◽  
Wage Gap ◽  
Wage Structure ◽  
Policy Implications ◽  
Wage Distribution ◽  
Content Type ◽  
Individual Worker ◽  
Palestinian Society ◽  
Worker Characteristics

PurposeThis paper examines the level and structure of the wage inequality between nonrefugee and refugee workers in Palestine and the extent to which such wage gap reflects any marginalization and discrimination against refugees. It also investigates how the disparities in distribution to individual worker characteristics contribute to the wage inequality in Palestine.Design/methodology/approachThe authors use both Oaxaca and Blinder (OB) (Oaxaca, 1973 and Blinder, 1973) and Fortin et al. (2011) unconditional quantile decomposition approaches to measure the size of the wage gap along with the wage distribution and to decompose the wage differences into productivity (i.e. explained or the composition effects) and wage structure effects (i.e. unexplained or discrimination effects).FindingsResults indicate that most of the wage gap between refugees and nonrefugees is attributed to the wage structure effect (possibly explained by discrimination) against refugees in the Palestinian labor market. The wage gap between refugees and nonrefugees is not uniform throughout the wage distribution and supports the “sticky floor effect.”Practical implicationsThis work introduces important policy implications for the policymakers in the Palestinian labor market. It reveals the economic and social factors, individual worker characteristics as well as labor market characteristics contribute to the wage inequality in Palestine.Social implicationsThis research reveals a crucial social challenge in the Palestinian society, represented by the wage discrimination against refugees in Palestine. This is despite the denial of such discrimination from official bodies, local institutions and many other policymakers. It also captures gender inequality between men and women.Originality/valueThis is the first empirical work in Palestine that contends with a very sensitive issue in the Palestinian society, that is, the discrimination against refugees in the Palestinian labor market. Most of the existing studies have approached this issue from a humanitarian view in order to show the deterioration of social and economic situations in the refugee camps.

Have Changes in Gender Segregation and Occupational Closure Contributed to Increasing Wage Inequality in Germany, 1992–2012?

2019 ◽  
Vol 36 (2) ◽  
pp. 236-249
Author(s):  
Nils Witte
Keyword(s):  
Wage Inequality ◽  
Wage Structure ◽  
Gender Segregation ◽  
West Germany ◽  
Wage Distribution ◽  
Occupational Characteristics ◽  
Occupational Closure ◽  
Wage Increases ◽  
Post Industrial

Abstract Wage inequality continued to increase through the 1990s and 2000s in post-industrial economies. This article contributes to the debate on occupations and inequality by assessing the role of occupational segregation and occupational closure for understanding the increase in inequality. Using employee data for West Germany in 1992 and 2012 and based on decompositions of unconditional quantile regressions the article investigates the contribution of changes in both occupational characteristics to changes in the wage structure. Our findings suggest that both the employment increase in more closed occupations and increased rewards in these occupations have contributed to wage increases across the distribution, especially in the lower half of the wage distribution. Our results further suggest disproportional wage increases in female-dominated occupations at the bottom of the distribution and disproportional wage decreases in male-dominated occupations at the top. If these occupational characteristics had remained at 1992 levels, then 90/10 wage inequality would have been 25 per cent higher in 2012. Thus, changes in occupational characteristics have contributed to wage compression in the observation period.

scholarly journals Can a Task-Based Approach Explain the Recent Changes in the German Wage Structure?

2009 ◽  
Vol 229 (2-3) ◽  
Author(s):  
Dirk Antonczyk ◽  
Bernd Fitzenberger ◽  
Ute Leuschner
Keyword(s):  
Wage Inequality ◽  
Personal Characteristics ◽  
Wage Structure ◽  
Wage Distribution ◽  
Full Time ◽  
Job Complexity ◽  
Noticeable Increase ◽  
Shaped Pattern ◽  
Type Decomposition ◽  
Task Assignments

SummaryThis paper investigates the changes in the German wage structure for full-time working males from 1999 to 2006. Our analysis builds on the task-based approach introduced by Autor et al. (2003), as implemented by Spitz-Oener (2006) for Germany, and also accounts for job complexity. We perform a Blinder-Oaxaca type decomposition of the changes in the entire wage distribution between 1999 and 2006 into the separate effects of personal characteristics and task assignments. In line with the literature, we find a noticeable increase of wage inequality between 1999 and 2006. The decomposition results show that the changes in personal characteristics explain some of the increase in wage inequality whereas the changes in task assignments strongly work towards reducing wage inequality. The coefficient effect for personal characteristics works towards an increase in wage inequality at the top of the wage distribution. The coefficient effect for the task assignments on the contrary shows an inverted U-shaped pattern. We conclude that altogether the task-based approach can not explain the recent increase of wage inequality in Germany.

scholarly journals The Immigrant and Native-Born Wage Distributions: Evidence from United States Censuses

ILR Review ◽  
2002 ◽  
Vol 56 (1) ◽  
pp. 97-121 ◽  
Author(s):  
Kristin F. Butcher ◽  
John Dinardo
Keyword(s):  
Gender Differences ◽  
Immigration Policy ◽  
Wage Gap ◽  
Wage Structure ◽  
Wage Distribution ◽  
Evidence Based ◽  
Recent Immigrants ◽  
Wage Distributions ◽  
The Mean ◽  
Exclusive Focus

Recent studies document a large widening of the immigrant/native-born mean wage gap since about 1970, a trend that some observers ascribe to post-1965 changes in U.S. immigration policy. These studies are limited, however, by their exclusive focus on men, which ignores important gender differences in the wage gap, and by the inadequacy of the mean wage for characterizing the gap when, as in recent decades, the wage distribution dramatically changes. This study of recent immigrants examines changes across the entire wage distribution, for both genders. The authors find evidence, based partly on gender differences, that minimum wages strongly influenced the gap. A counterfactual analysis also indicates that if recent immigrants in 1970 had faced the 1990 wage structure, their wage distribution would have closely resembled that of recent immigrants in 1990. These and other results suggest that the increasing wage gap is linked to changes in the wage structure.

Does Job Displacement Explain Wage Inequality: A Nonparametric Examination

2003 ◽  
Author(s):  
Donna K. Ginther ◽  
K. Patrick Lampani
Keyword(s):  
Wage Inequality ◽  
Wage Structure ◽  
Wage Distribution ◽  
Estimation Methods ◽  
Job Displacement ◽  
Strong Connection ◽  
Worker Displacement ◽  
Biased Technological Change ◽  
Plausible Mechanism ◽  
Rotation Groups

We examine the effect of job displacement on changes in the wage structure using nonparametric estimation methods. We argue that job displacement is a plausible mechanism that transmits causes such as skill-biased technological change or deindustrialization to changes in the wage structure. Employing a combination of data from the January and Outgoing Rotation Groups of the Current Population Survey, we compare the distribution of earnings prior to and after worker displacement. Although the conventional wisdom argues for a strong connection between worker displacement and changes in the wage structure, we find limited effects of displacement on the wage distribution.

scholarly journals Factores condicionantes y dependencia espacial en el grado de concentración salarial en España

2020 ◽  
Vol 34 (3) ◽  
pp. 597
Author(s):  
Beatriz Larraz ◽  
Marcos Herrera
Keyword(s):  
Wage Inequality ◽  
Sampling Strategy ◽  
Wage Structure ◽  
Wage Distribution ◽  
Nuisance Parameters ◽  
Final Model ◽  
Spatial Panel ◽  
Spatial Panel Data ◽  
The Impact ◽  
Employment Characteristics

In recent years, unequal wage distribution in Spain appears to be of particular importance. This article seeks to contribute to the literature so far going deeper into the knowledge of the possible determinants of this wage concentration in Spain. The impact of workers’ personal and employment characteristics and those of the company in the distribution of wages will be analyzed. The analysis was carried out from the latest available official micro-data  on wages corresponding to the Wage Structure Survey 2010 in 52 Spanish provinces. Subsequently, using the latest developments in spatial panel data, any possible spatial dependence and the different specification options will be analyzed. The results show that fixed-effect SLX is appropriate to explain wage inequality. The sampling strategy means that the final model must be includes a correction of nuisance parameters due to the correlation between consecutive samples.

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