A decomposition method to evaluate the 'paradox of progress' with evidence for Argentina

Javier Alejo, Leonardo Gasparín (), Gabriel Montes Rojas () and Walter Sosa Escudero ()
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Leonardo Gasparín: Departmento de Economía, Universidad de La Plata
Gabriel Montes Rojas: Departmento de Economía, Universidad de Buenos Aires
Authors registered in the RePEc Author Service: Gabriel Montes-Rojas ()

No 160, Working Papers from Universidad de San Andres, Departamento de Economia

Abstract: The 'paradox of progress' is an empirical regularity that associates more education with larger income inequality. Two driving and competing factors behind this phenomenon are the convexity of the 'Mincer equation' (that links wages and education) and the heterogeneity in its returns, as captured by quantile regressions. We propose a joint least-squares and quantile regression statistical framework to derive a decomposition in order to evaluate the relative contribution of each explanation. The estimators are based on the 'functional derivative' approach. We apply the proposed decomposition strategy to the case of Argentina 1992 to 2015.

Keywords: paradox of progress; quantile regression; inequality; returns to education; Argentina (search for similar items in EconPapers)
JEL-codes: C21 I24 J31 J46 O54 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2021-12, Revised 2021-12
New Economics Papers: this item is included in nep-lam, nep-lma and nep-ltv
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https://webacademicos.udesa.edu.ar/pub/econ/doc160.pdf Version, December 2021. (application/pdf)

Related works:
Journal Article: A decomposition method to evaluate the ‘paradox of progress’, with evidence for Argentina (2024)
Working Paper: A decomposition method to evaluate the ‘paradox of progress’ with evidence for Argentina (2022)
Working Paper: A decomposition method to evaluate the "paradox of progress", with evidence for Argentina (2021)
Working Paper: A decomposition method to evaluate the `paradox of progress' with evidence for Argentina (2021)
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