• Corpus ID: 244920606

A decomposition method to evaluate the `paradox of progress' with evidence for Argentina

@inproceedings{Alejo2021ADM,
  title={A decomposition method to evaluate the `paradox of progress' with evidence for Argentina},
  author={Javier Alejo and Leonardo Gasparini and Gabriel Montes-Rojas and Walter Sosa-Escudero},
  year={2021}
}
The ‘paradox of progress’ is an empirical regularity that associates more education with larger income inequality. Two driving and competing factors behind this phenomenon are the convexity of the ‘Mincer equation’ (that links wages and education) and the heterogeneity in its returns, as captured by quantile regressions. We propose a joint least-squares and quantile regression statistical framework to derive a decomposition in order to evaluate the relative contribution of each explanation. The… 

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