Aurora Galego

Decomposition of regional wage differences along the wage distribution in Portugal: the importance of covariates

Unlike previous studies, in this paper we estimate the contribution of covariates for the regional wage decomposition components along the wage distribution employing a method first described in 2009 by S Firpo, N Fortin, and T Lemieu (Econometrica 77 953–973). We consider the case of Portugal, a country with persistent and large regional wage gaps. We find that education, occupation, and firm size are the most important factors in explaining the growing importance of the composition effect. The wage structure effect, in turn, is mainly determined by differences in reward for experience and tenure. Moreover, we conclude that the importance of these covariates for both effects is not equal along the wage distribution.

Evidence on Gender Wage Discrimination in Portugal: parametric and semi-parametric approaches

In this paper we use two alternative approaches to study the extent of gender wage discrimination in Portugal. Both methods involve the estimation of wage equations for males and females and the Blinder [1973] and Oaxaca [1973] decomposition. However, to take into account possible sample selection bias, we consider both parametric and semi-parametric methods. First, we consider a parametric approach that relies on distributional assumptions about the distribution of the error terms in the model (Vella (1992, 1998) and Wooldridge (1998)). Within this approach, if the distributional assumption is not satisfied, the parameters? estimates may be inconsistent. Secondly, we apply Li and Wooldridge [2002] semi-parametric estimator, which does not assume any known distribution on the joint distribution of the errors of the wage equation and of the sample selection equation; the distribution has an unknown form and is estimated through non-parametric kernel techniques.We employ micro data for Portugal from the European Community Household Panel (ECHP). The results from both approaches provide evidence in favour of the existence of gender wage discrimination in Portugal. However, the extent of labour market discrimination decreases when sample selection bias corrections are taken into account.

Inter-Regional Wage Differentials in Portugal: An Analysis Across the Wage Distribution

Pereira J. and Galego A. Inter-regional wage differentials in Portugal: an analysis across the wage distribution, Regional Studies. Typically, studies on regional wage differentials are based on ordinary least squares (OLS) estimates. Quantile regression is an alternative approach which allows these differences to be studied across the whole wage distribution. In this study, the quantile regression framework is considered for the analysis of regional wage differences in Portugal. The findings reveal significant differences in wage equations coefficients between regions for the various quantiles. Furthermore, it is concluded that the regional wage differentials and the components explained by differences in endowments and differences in returns increase across the whole wage distribution.

Intra-regional Wage Inequality in Portugal

Abstract Studies on intra-regional inequality are scarce, particularly for European countries. This paper aims at further investigating inequality by focusing on wage differences within regions. We consider the case of Portugal, which is considered one of the countries with the highest level of economic inequality. In particular, we analyse the evolution of intra-regional wage inequality between 1995 and 2005, employing a quantile-based decomposition method. Our results show that wage inequality evolution has been different across the various regions, increasing in some regions and decreasing in others. Different changes in the workforce composition explain these diverse developments.

Institutional and Economic Determinants of FDI: A Comparison between the European Union and the MENA Region

Abstract FDI flows to the MENA region have been relatively low when compared to neighboring countries. This paper aims at investigating whether there are significant region-specific factors for FDI performance in MENA and EU regions. We employ a panel data approach and use the inward FDI performance index as dependent variable, including both institutional and macroeconomic variables as FDI determinants. The results reveal similar impact of the economic factors but significant differences between the two regions with regard to institutional determinants particularly investment climate, government size and trade barriers. This leads to the conclusion that more appropriate policies are needed in the MENA region in order to develop a friendly economic and institutional environment to attract foreign investors.

Understanding the transition to work for first degree university graduates in Portugal

A traditional way of looking at the importance of universities assumes that these are sources of positive effects from the viewpoint of the inputs. In accordance to this perspective, the importance of a university can be measured by its regional/national multiplier effects. This perspective can be complemented with the analysis of the issues associated with the transition to work by their graduates. The paper thus analyses the factors that may be important to explain the time to obtain the first job by first degree students, using a sample of students from one university in Portugal. In doing so, we estimate several specifications of discrete-time duration models. The results show that there are significant differences among the students from the several courses and highlight the importance of the final mark in the course. Nevertheless, in particular, we conclude that there are no significant differences between the area of Economics and Management and the area of Engineering and that these study areas are the most successful ones. We also did not find any significant differences between male and female students. Finally, we also conclude that there are significant differences on the probability of leaving unemployment among the several years considered in the sample, which reflects the business cycle.