Decomposition and wage inequality

Abstract

Earning differentials are investigated by a quantile regressions based decomposition, which disentangles the inequalities linked to the covariates and coefficients at various quantiles. Gender and region are considered the main sources of inequality. The unexplained gender and regional differences decrease at the highest wages. Their combination at the lower wages’ level affects women more, causing a so-called sticky floor. Gender and regional covariate effects show a prevalence of women covariates compared with the men’s group, and a prevalence of southern women covariates within the women’s group, particularly at the higher quantiles. This can be interpreted as a glass ceiling hindering southern women at higher wages.