Wage Discrimination: Direct vs. Reverse Regression Method

Constantine Kapsalis

MPRA Paper from University Library of Munich, Germany

Abstract: Two methods of estimating wage discrimination have been employed so far in the literature: the direct regression method and the reverse regression method. What distinguishes the two methods is their assumption about the wage determination process: The direct regression method assumes that employees are paid according to their qualifications; by contrast, the reverse regression method assumes that wages are determined by the nature of the job and it is the qualifications of employees within that job classification that may vary. This paper develops a new measure of wage discrimination, referred to here as the combined method, which is based on combining the results of the two wage discrimination measures. Using randomly generated data, it can be demonstrated that the combined method will produce the correct estimate of wage discrimination, assuming that the two alternative wage determination processes outlined above are equally common in the labour market.

Keywords: wage; discrimination (search for similar items in EconPapers)
JEL-codes: J71 (search for similar items in EconPapers)
Date: 2020-09-28
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/103184/1/MPRA_paper_103184.pdf original version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:103184

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().