Connecting the Unobserved Dots : A Decomposition Analysis of Changes in Earnings Inequality in Urban Argentina, 1980-2002
There are several possible explanations for the observed changes in inequality, the returns to education, and the gap between the wages of informal and formal salaried workers in Argentina over the period 1980-2002. Largely due to the lack of evide...
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| Language: | English |
| Published: |
World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2008/05/9454264/connecting-unobserved-dots-decomposition-analysis-changes-earnings-inequality-urban-argentina-1980-2002 http://hdl.handle.net/10986/6678 |
| Summary: | There are several possible explanations
for the observed changes in inequality, the returns to
education, and the gap between the wages of informal and
formal salaried workers in Argentina over the period
1980-2002. Largely due to the lack of evidence for competing
explanations, skill-biased technical change is the most
likely explanation for the increases in the returns to
education that occurred in the 1990s. Using a
semi-parametric re-weighting variance decomposition
technique and data from the Permanent Household Survey, the
authors show that during the same period there was an
increase in the returns to unobserved skill. This finding
lends support to the hypothesis that skill-biased technical
change has been a main driver of increases in inequality in
Argentina. The pattern of changes suggests that the growth
in returns to unobserved skill may have been partly
responsible for the relative deterioration of informal
salaried wages during the 1990s. |
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