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IZA
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Changes in the Distribution of Male and Female Wages Accounting for Employment Composition Using Bounds
by
Richard Blundell, Amanda Gosling, Hidehiko Ichimura, Costas Meghir
(October 2004)
published in: Econometrica, 2007, 75(2), 323–363
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.
Text: See Discussion Paper No. 1350 
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