A decomposition method to evaluate the `paradox of progress' with evidence for Argentina
Econometrics
2021-12-08 v1
Abstract
The `paradox of progress' is an empirical regularity that associates more education with larger income inequality. Two driving and competing factors behind this phenomenon are the convexity of the `Mincer equation' (that links wages and education) and the heterogeneity in its returns, as captured by quantile regressions. We propose a joint least-squares and quantile regression statistical framework to derive a decomposition in order to evaluate the relative contribution of each explanation. The estimators are based on the `functional derivative' approach. We apply the proposed decomposition strategy to the case of Argentina 1992 to 2015.
Keywords
Cite
@article{arxiv.2112.03836,
title = {A decomposition method to evaluate the `paradox of progress' with evidence for Argentina},
author = {Javier Alejo and Leonardo Gasparini and Gabriel Montes-Rojas and Walter Sosa-Escudero},
journal= {arXiv preprint arXiv:2112.03836},
year = {2021}
}
Comments
29 pages, 2 figures, 2 tables