Decomposing wage discrimination in Germany and Austria with counterfactual densities

Thomas Grandner () and Dieter Gstach ()
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Thomas Grandner: Vienna University of Economics and Business
Dieter Gstach: Vienna University of Economics and Business

Department of Economics Working Papers from Vienna University of Economics and Business, Department of Economics

Abstract: Using income and other individual data from EU-SILC for Germany and Austria, we analyze wage discrimination for three break-ups: gender, sector of employment, and country of origin. Using the method of Machado and Mata [2005] the discrimination over the whole range of the wage distribution is estimated. Significance of results is checked via confidence interval estimates along the lines of Melly [2006]. To narrow down the extent of discrimination both basic decomposition possibilities are compared. The economies of Germany and Austria appear structurally very similar. Especially the institutional setting of the labor markets seem to be closely comparable. One would, therefore, expect to find similar levels and structures of wage discrimination. Our findings deviate from this conjecture significantly.

Keywords: Wage discrimination; decomposition; quantile-regression (search for similar items in EconPapers)
JEL-codes: J31 J71 (search for similar items in EconPapers)
Date: 2012-08
New Economics Papers: this item is included in nep-lab, nep-lma and nep-ltv
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