Working Paper: CEPR ID: DP4709
Authors: Shoshana Neuman; Ronald L. Oaxaca
Abstract: The purpose of this Paper is to investigate wage structures of professional workers in the Israeli labour market, using data from the most recent 1995 Census and correcting for selectivity at the stage of entrance into the occupation. The sample of professionals is decomposed into several subsamples: men and women, and within each gender a distinction is made between Easterners (originating from Asian/African countries) and Westerners (from European/American countries of origin). Comparisons by gender and ethnicity can then be made.Characteristics (endowments) and wage structures of the four groups are presented.Wage equations include the Inverse of Mill's Ratio as a regressor to correct for selection into the professional occupations. Wage differences are then examined and decomposed into three components: endowments (human capital), discrimination and selectivity. Following the methodology presented in Neuman and Oaxaca (2004), four alternative decompositions are suggested and discussed.
Keywords: age; education; employment spells; ethnicity; gender; marital status; nonemployment
JEL Codes: J12; J15; J16; J21; J22
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| selectivity effects (C24) | gender wage gap (J31) |
| selection effects (C52) | observed ethnic wage gap among professionally employed men (J79) |
| selection effects (C52) | observed ethnic wage gap among professionally employed women (J79) |
| absence of selection effects (C52) | discrimination component (J71) |
| absence of selection effects (C52) | observed wage gaps among westerners (J31) |
| absence of selection effects (C52) | ethnic wage gaps among easterners (J31) |
| understanding selection (C52) | effective anti-discrimination policies (J78) |