Decomposition methods for analyzing inequality changes in Latin America 2002–2014

John Ariza () and Gabriel Montes-Rojas ()

Empirical Economics, 2019, vol. 57, issue 6, No 11, 2043-2078

Abstract: Abstract This paper studies recent inequality patterns and the distributional effects of schooling and job informality on wage inequality in Argentina, Brazil, Colombia and Mexico during the 2002–2014 period. By means of a quantile regression framework, we decompose changes in the wage gap using several techniques including the Machado and Mata algorithm, the RIF regression unconditional quantile regression method and the random-coefficients quantile regression representation. Results show that the reduction in wage inequality is explained by the improvements in the lower part of the wage distribution in which the pricing rather than the composition effect explains most of the changes. We found that the composition effect of education was unequalizing, while their pricing effect was inequality reducing. Job formality favored relatively more workers in the lower part of the distribution and had an important pricing effect below the median for all countries, but only in the 2002–2008 period.

Keywords: Wage structure; Quantile regressions; Education; Inequality; Informality; Latin America; J31; C21; I24; J46; O54 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://link.springer.com/10.1007/s00181-018-1518-4 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

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:spr:empeco:v:57:y:2019:i:6:d:10.1007_s00181-018-1518-4

Ordering information: This journal article can be ordered from
http://www.springer. ... rics/journal/181/PS2

DOI: 10.1007/s00181-018-1518-4

Access Statistics for this article

Empirical Economics is currently edited by Robert M. Kunst, Arthur H.O. van Soest, Bertrand Candelon, Subal C. Kumbhakar and Joakim Westerlund

More articles in Empirical Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().