The Distributive Effects of Education: An Unconditional Quantile Regression Approach

Abstract

We use recent unconditional quantile regression methods (UQR) to study the distributive effects of education in Argentina. Standard methods usually focus on mean effects, or explore distributive effects by either making stringent modeling assumptions, and/or through counter-factual decompositions that require several temporal observations. An empirical case shows the flexibility and usefulness of UQR methods. Our application for the case of Argentina shows that education contributed positively to increased inequality in Argentina, mostly due to the effect of strongly heterogeneous effects of education on earnings.

Recent decline in wage inequality and formalization of the labour market in Argentina

“…Alejo, Gabrielli, and Sosa-Escudero (2014), Gasparini and Cruces (2010) and Cornia (2012) are examples of studies for Argentina, while Lustig, Lopez-Calva, and Ortiz-Juarez (2013) and obtain similar results in comparative studies for Latin American countries.…”

Locus of Control and Savings

“…only among individuals with the same IQ, age, education, etc. (Fournier & Koske, 2013;Alejo et al, 2011). This conditional distribution effectively corresponds to the error (Ker, 2011;Froehlich & Melly, 2010).…”

A tale of two decades: income inequality and public policy in Argentina (1996-2014)

“…Even with significant growth rates after the 2001-2002 recession, Argentina did not experience significant structural change. 2 Based on this, some authors argue that the economic structure may act as an impediment for further improvement or even sustaining recent improvements in income distribution. Informality and precarious work still have relatively high levels, and there is significant labour market segmentation and marginality in terms of some sectors of the population's economic activity All of these present a socio-economic challenge for Argentina (Coatz, Garcia-Diaz & Woyecheszen, 2011;Lavopa, 2008;Salvia & Vera, 2013;Vera, 2011).…”

“…Associated with this focus, explanations for the rise in inequality and its subsequent fall stress market-related explanations such as skill bias (for example, Bertranou & Maurizio, 2011;Maurizio, 2014;Trujillo & Villafañe, 2011). 2 The structural heterogeneity does not only imply diverse productivity patterns across sectors but also different labour market structures and abilities for job creation. Thus there are significant differences in workers income between more and less productive economic sectors (CEPAL, 2010(CEPAL, & 2012Infante, 2011).…”