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Publicação
Inequality under right censoring
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Orientador(es)
Resumo(s)
In this paper we investigate potential changes which may have occurred over the last two decades in the probability mass of the right tail of the wage distribution, through the analysis of the corresponding tail index. In specific, a conditional tail index estimator is introduced which explicitly allows for right tail censoring (top-coding), which is a feature of the widely used current population survey (CPS), as well as of other surveys. Ignoring the top-coding may lead to inconsistent estimates of the tail index and to under or over statements of inequality and of its evolution over time. Thus, having a tail index estimator that explicitly accounts for this sample characteristic is of importance to better understand and compute
the tail index dynamics in the censored right tail of the wage distribution. The contribution of this paper is threefold: i) we introduce a conditional tail index estimator that explicitly handles the top-coding problem, and evaluate its finite sample performance and compare it with competing methods; ii) we highlight that the factor values used to adjust the top-coded
wage have changed over time and depend on the characteristics of individuals, occupations and industries, and propose suitable values; and iii) we provide an in-depth empirical analysis of the dynamics of the US wage distribution’s right tail using the public-use CPS database from 1992 to 2017.
Descrição
Palavras-chave
Wage Inequality Tail Index Top - Coding Current Population Survey Wage Distribution Pareto Occupations
Contexto Educativo
Citação
Nicolau, João. Pedro Raposo and Paulo M. Rodrigues .2020. “Inequality under right censoring” .Banco de Portugal. Economic and Research Department. Working Papers nº 8 | 2020.