Empirical Economics

, Volume 26, Issue 1, pp 135–148

Wage inequality in a developing country: decrease in minimum wage or increase in education returns

  • Xulia González
  • Daniel Miles

DOI: 10.1007/s001810000056

Cite this article as:
González, X. & Miles, D. Empirical Economics (2001) 26: 135. doi:10.1007/s001810000056

Abstract.

In this paper we analyze the increase in wage inequality observed in the Uruguayan labour market during the last decade, by studying how the changes in minimum wage and returns to education affected the wage structure. Although in most developed countries a significant proportion of the increase in wage inequality is explained by a fall in the real minimum wage, this is not the case for the Uruguayan labour market. We observe that returns to education increased significantly, which could explain the increase of wage dispersion by its effects on the upper tail of the wage distribution. To derive these conclusions we follow a parametric and nonparametric quantile regression approach.

Copyright information

© Springer-Verlag Berlin Heidelberg 2001

Authors and Affiliations

  • Xulia González
    • 1
  • Daniel Miles
    • 1
  1. 1.Departamento de Economı´a Aplicada, Fac. Económicas, Universidad de Vigo. Lagoas Marcosende sn, Pontevedra, Spain. (email: dmiles@uvigo.es)ES