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RESEARCH PAPER NO. 854
BOUNDING ESTIMATES OF WAGE DISCRIMINATION
BY
J. G. HIRSCHBERG & D. J. SLOTTJE
AUGUST 2002
Department of Economics. University of Melbourne. Melbourne Victoria 3010 Australia
The Blinder Oaxaca decomposition method for defining discrimination
from the wage equations of two groups has
had a wide degree of application. However,
the implication of this measure can very
dramatically depending on the definition
of the non-discriminatory wage chosen for
comparison. This paper uses a form
of extreme bounds analysis to define the
limits on the measure of discrimination
that can be obtained from these decompositions.
A simple application is presented
to demonstrate the use of the bootstrap
to define the distributions of the discrimination
measure.
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