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Using a GB2 distribution to estimate gender wage discrimination
Date de parution
2017-6-22
Résumé
The generalized beta of the second kind (GB2) distribution was used in the literature to model wages. It is a distribution characterized by three shape parameters and a scale parameter. McDonald (1984) showed that it performs better in terms of adjusting wages than
other distributions, such as Singh-Maddala or generalized gamma. We investigate a slightly changed version of the GB2 by introducing covariates in one of the parameters. The scale parameter takes the form of an exponential function which accounts for the characteristics
of the observed individuals. Conditional to their characteristics, each individual wage has its own distribution. The assumption that all wages follow the same distribution GB2 is thus relaxed. The proposed method is used to model the wages of Swiss men and women in 2010. A counterfactual wage distribution is then built, by using the characteristics of men but the estimated parameters of women. This artificial wage distribution represents the distribution of wages of women, if they had the same characteristics of men. The purpose is to quantify to what extent gender discrimination occurs.
other distributions, such as Singh-Maddala or generalized gamma. We investigate a slightly changed version of the GB2 by introducing covariates in one of the parameters. The scale parameter takes the form of an exponential function which accounts for the characteristics
of the observed individuals. Conditional to their characteristics, each individual wage has its own distribution. The assumption that all wages follow the same distribution GB2 is thus relaxed. The proposed method is used to model the wages of Swiss men and women in 2010. A counterfactual wage distribution is then built, by using the characteristics of men but the estimated parameters of women. This artificial wage distribution represents the distribution of wages of women, if they had the same characteristics of men. The purpose is to quantify to what extent gender discrimination occurs.
Notes
, 6th Young Researchers' Conference, University of Lausanne, Lausanne
Identifiants
Type de publication
conference presentation
