Journal Article

Differences in Wage Distributions Between Canada and the United States: An Application of a Flexible Estimator of Distribution Functions in the Presence of Covariates

Stephen G. Donald, David A. Green and Harry J. Paarsch

in The Review of Economic Studies

Published on behalf of Review of Economic Studies Ltd

Volume 67, issue 4, pages 609-633
Published in print October 2000 | ISSN: 0034-6527
Published online October 2000 | e-ISSN: 1467-937X | DOI: http://dx.doi.org/10.1111/1467-937X.00147
Differences in Wage Distributions Between Canada and the United States: An Application of a Flexible Estimator of Distribution Functions in the Presence of Covariates

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We construct a tractable, flexible-functional-form estimator of cumulative distribution functions for non-negative random variables which admits large numbers of covariates. The estimator adopts and extends techniques from the spell-duration literature for estimating hazard functions to distribution functions for wages, earnings, and income. We apply these methods to investigate sources of wage inequality for full-time male workers between Canada and the United States, finding that the Canadian wage density has a thinner left tail because low-educated workers have higher pay and a thinner right tail because of a lower proportion of highly-educated workers. Unions appear to play a large role in these outcomes.

Journal Article.  0 words. 

Subjects: Economics

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