Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/193338 
Year of Publication: 
2018
Series/Report no.: 
IZA Discussion Papers No. 12044
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
We employ CPS data to analyze the sources of hourly real wage changes in the United States for 1976 to 2016 at various quantiles of the wage distribution. We account for the selection bias from the annual hours of work decision by developing and implementing an estimator for nonseparable selection models with censored selection rules. We then decompose wage changes into composition, structural and selection effects. Composition effects have increased wages at all quantiles but the patterns of wage changes are generally determined by the structural effects. Evidence of changes in the selection effects only appear at lower quantiles of the female wage distribution. The combination of these various components produce a substantial increase in wage inequality. This increase has been exacerbated by the changes in females' working hours.
Subjects: 
wage inequality
wage decomposition
nonseparable model
selection bias
JEL: 
C14
I24
J00
Document Type: 
Working Paper

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