Decomposing the Gaps between Afro-descendants and Whites along the Wage Distribution

Abstract

In this paper we analyze the racial wage gap in Uruguay in the period 2006-2009 using data from the Household Survey collected by INE (the National Statistics Institute). We select a sample of full-time men workers aged 25-59. We decompose the gap between log hourly-wages of Whites and Afro-descendants at the mean and at each percentile of the wage distribution using the distributional regression approach proposed in Chernozhukov et al. (2009). We find that Afro-descendants are paid less in all position of the wage distribution and that the gap increases from the median up. It is around 0.20 until the median and reaches 0.60 at percentile 90. The results from the decomposition show that both the gap that can be explained by selected characteristics (years of schooling, potential experience and region) and the residual widen at the upper tail of the distribution.Wage gap, Afro-descendants, Discrimination, Counterfactual estimation