Female Wage Inequality in Latin American Labor Markets
The author uses quantile regression to document the evolution of the earnings structure of salaried and self-employed female workers in urban areas in three Latin American countries-Argentina, Brazil, and Costa Rica-after structural reforms were introduced. The analysis covers pre- and post-reform years: in Argentina, 1988 and 1997, and in Brazil and Costa Rica, 1989 and 1995. Four primary results emerge from the analysis: 1) After other characteristics are controlled for, wage premiums to human capital, labor experience, and other characteristics vary along the conditional distribution. This indicates that a homoscedastic model is not suitable for analyzing wage differentials among working women in these countries. 2) Wage inequality among women fell in the self-employment sector in all three countries. In the salaried sector results were mixed, with wage inequality declining in Argentina but increasing slightly in Costa Rica. 3) The decline in female wage inequality can be explained in part by changes in the premium to education. Results indicate that the relative premium to education fell in Argentina and Brazil-that is, the adjusted wage differential between more educated and less educated women decreased between the sampled years in these countries. In contrast, wage differentials arising from education increased in Costa Rica. 4) Women earning less than their characteristics would predict seemed to fare well with the economic opening: domestic workers, nonwhite workers, and the least educated in the lower quantiles saw their wage premiums increase relative to those of the control groups. These results are consistent with the predictions of the Heckscher-Ohlin theory of trade liberalization: those with less human capital saw wage gains relative to those with more human capital.
Summary: | The author uses quantile regression to
document the evolution of the earnings structure of salaried
and self-employed female workers in urban areas in three
Latin American countries-Argentina, Brazil, and Costa
Rica-after structural reforms were introduced. The analysis
covers pre- and post-reform years: in Argentina, 1988 and
1997, and in Brazil and Costa Rica, 1989 and 1995. Four
primary results emerge from the analysis: 1) After other
characteristics are controlled for, wage premiums to human
capital, labor experience, and other characteristics vary
along the conditional distribution. This indicates that a
homoscedastic model is not suitable for analyzing wage
differentials among working women in these countries. 2)
Wage inequality among women fell in the self-employment
sector in all three countries. In the salaried sector
results were mixed, with wage inequality declining in
Argentina but increasing slightly in Costa Rica. 3) The
decline in female wage inequality can be explained in part
by changes in the premium to education. Results indicate
that the relative premium to education fell in Argentina and
Brazil-that is, the adjusted wage differential between more
educated and less educated women decreased between the
sampled years in these countries. In contrast, wage
differentials arising from education increased in Costa
Rica. 4) Women earning less than their characteristics would
predict seemed to fare well with the economic opening:
domestic workers, nonwhite workers, and the least educated
in the lower quantiles saw their wage premiums increase
relative to those of the control groups. These results are
consistent with the predictions of the Heckscher-Ohlin
theory of trade liberalization: those with less human
capital saw wage gains relative to those with more human capital. |
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