After a sustained economic growth period at the end of the last
century and the beginning of this one, Latin America still faces high
inequality and lower well-being indicators among women,
afro-descendants, and indigenous peoples. This is a period in which the
world and particularly Latin America has experienced important changes
regarding the role of women and men. Marriage, education and work
decisions have evolved and, as a result, women’s visibility at
home, at school, in the labor markets and in society have evolved as
well. But there are still, however, important challenges in the labor
markets. Earnings differentials as well as occupational and
hierarchical segregation are commonly accepted as the norm in the
region’s labor markets.
For the diverse racial and ethnic groups the situation has been less
auspicious than for women. Statistics reveal that traditionally
excluded ethnic groups have worse poverty and income outcomes,
reflected in issues such as restricted access to public services,
poorer health conditions, lack of political representation, confinement
into low productivity activities and prevalent discrimination. The
evidence points that in Latin America, a racially and ethnically
diverse region, the benefits of the recent progress have not reached
equally indigenous peoples and Afro-descendants. This pattern can be
traced to lower human capital endowments, manifested in poorer
educational performance and fewer years of job experience. In this way,
these groups have been less able to benefit from the economic
opportunities generated within this prosperous period.
This book is about gender and ethnic differences in labor markets
earnings. It revolves around the question: to what extent the gender
(ethnic) differences in earnings are a result of gender (ethnic)
differences in observable individuals’ characteristics that the
labor markets reward? Such question is answered with a novel
methodological approach based on matching comparisons, resembling the
Oaxaca Blinder (OB) decompositions, extending their scope. What would
the distribution of females’ and males’ earnings be if they
had equal levels of education, if they worked the same quantity of
hours per week, if they worked in the same kind of formal jobs, or in
firms of the same size? What would happen with the earnings gap, for
instance, if men and women had the same occupations or were distributed
equally through economic sectors? Further on, what would happen if all
men and women in the labor markets were equally distributed along all
of these characteristics at the same time? The novelty of the
methodology introduced in this book is that it allows us to create
fictional labor markets where these counterfactuals are true.
Furthermore, this book addresses not only the extent to which those
differentials can be explained by individuals’ characteristics,
but also how have these gaps evolved during the last two decades. In
this way, it allows the discussion of policy options for these pressing
issues in the region.
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