Desigualdad salarial en uruguay, 1981-207

In the present paper we study the evolution of wage inequality in Uruguay from 1981 to 2007. To identify the main forces behind wage inequality evolution we apply the decomposition methodology proposed by Lemieux (2002). This methodology puts together the identification of the “price” effect by the method proposed by the Juhn, Murphy & Pierce (1993) with the identification of the “characteristics” effect by the method developed by DiNardo, Fortin & Lemieux (1996). An important advantage of the chosen methodology is that it allows to identify the effect of each observable characteristic of those included in the wage regression. We find that the rise observed in the level of wage inequality in the period occurred mainly during the nineties and that the main force driving wage inequality is the evolution of returns to education, specially at the tertiary level. Notwithstanding, the evolution and determinants above and bellow the median of the wage distribution are not the same. While in the upper part the rise took place in the nineties and was due to increasing returns to education, in the bottom of the distribution the rise occurred mainly during the macroeconomic crises of 1981 & 2002.