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Université de Fribourg

Causal Pitfalls in the Decomposition of Wage Gaps

Huber , Martin

In: Journal of business & economic statistics, 2015, vol. 33, no. 2, p. 179-191

The decomposition of gender or ethnic wage gaps into explained and unexplained components (often with the aim to assess labor market discrimination) has been a major research agenda in empirical labor economics. This article demonstrates that conventional decompositions, no matter whether linear or nonparametric,areequivalenttoassuminga(probablytoo)simplemodelofmediation(aimed atassessing...

Université de Fribourg

On the sensitivity of wage gap decompositions

Huber, Martin ; Solovyeva, Anna

(Working Papers SES ; 497)

This paper investigates the sensitivity of average wage gap decompositions to methods resting on different assumptions regarding endogeneity of observed characteristics, sample selection into employment, and estimators’functional form. Applying five distinct decomposition techniques to estimate the gender wage gap in the U.S. using data from the National Longitudinal Survey of Youth 1979,...