No. 20 Wage Distribution in Chile: Does Gender Matter? A Quantile Regression Approach by Claudio Montenegro

This paper analyzes gender differentials in the returns to education, the returns to experience, and gender wage differentials in the Chilean case. It uses the standard “Mincerian” wage equation and estimates it separately by gender using the quantile regression method. Then, using the Oaxaca decomposition, we breakdown the total wage gap into an explained term (due to differences in endowments) and into a residual (or unexplained term). Chilean nation-wide data for the years 1990, 1992, 1994, 1996 and 1998 are used in the estimations. The results show systematic differences in the returns to education and to experience by gender along the conditional wage distribution. The paper also finds clear evidence that the unexplained wage differential is higher in the upper quantiles of the conditional wage distribution. The results are remarkably stable and consistent across years.

This paper is part of a series of papers on selected topics commissioned for the forthcoming Policy Research Report(PRR) on Gender and Development. The PRR is being carried out by Elizabeth King and Andrew Mason and co-sponsored by the World Bank’s Development Economics Research Group and the Gender and Development Group of the Poverty Reduction and Economic Management Network. Printed copies of this paper are available free from the World Bank, 1818 H Street NW, Washington, DC 20433. Please contact Owen Haaga, in room MC8-434 or at Gnetwork@worldbank.org. Comments are welcome and should be sent directly to the author(s) at cmontenegro@worldbank.org.