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Wage Inequality on the Rise: The Role of Workers’ Characteristics

Guillermo Alves (), Matias Brum () and Mijail Yapor ()

Journal of Income Distribution, 2013, vol. 22, issue 2, 99-123

Abstract: In recent decades, wage inequality has been an important factor behind the rise in income inequality around the world. The leading explanation for increased wage inequality has been the increasing returns to human capital, usually attributed to changing technology and globalization. This article studies the rise in wage inequality in Uruguay, a small open developing economy. In contrast with popular explanations, our results highlight a strong and gradual inequalizing effect of changes in workers’ characteristics, such as increased schooling and age, decline of public sector employment and contraction of employment in manufacturing together with increased employment in services.

Keywords: wage inequality; quantile regressions; inequality decomposition; Uruguay (search for similar items in EconPapers)
JEL-codes: D31 J31 (search for similar items in EconPapers)
Date: 2013
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