Income inequality and wage differentials: A quantile regression approach

This dissertation consists of three essays on quantile regression applications to labor economics issues; more specifically, wage inequality and the gender wage gap. In the last ten years the empirical literature using quantile regression has increased significantly, and a considerable number of these applications have been on labor economics related topics.;Using quantile regression I seek a richer description of the problem of wage inequality in Brazil and the gender wage gap in the United States. In the first essay, I apply Machado and Mata's (2000) methodology to simulate marginal distributions from the quantile regression process, and then investigate sources of high wage inequality in Brazil. The results show that we had a real wage loss over the period and the returns to workers characteristics contributed to that.;The second chapter (co-authored with Tiago Cavalcanti) applies quantile regression techniques to the well-known Oaxaca coefficient of discrimination. This methodology provides different coefficients for different quantiles of the conditional wage distribution and is more informative than the technique based on OLS regression. Results show that the part of the wage gap not explained by differences in skills between the genders is higher at the upper quantiles of the conditional wage distribution, suggesting that "discrimination" against women increases as we move from low to high quantiles.;The third chapter provides a descriptive analysis of the gender wage gap using quantile regression. Many studies have examined the gender wage gap in the United States but this is the first to provide systematic analysis of the gender wage gap using quantile regression over time. Using data from both the March Current Population Survey (CPS) and the Outgoing Rotation Group files of the CPS, I find a narrowing of the gender wage gap over time. Furthermore there is a great deal of heterogeneity across quantiles of the conditional wage distribution of wages by gender. Although the gender pay gap has declined dramatically in recent decades, not all women gained form this change equally.