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American Economic Review: Vol. 101 No. 3 (May 2011)

AER Volume. 101, Issue 3 | Previous ArticleNext Article

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Applying Fixed Effects to Hierarchical Segregation Models

Article Citation

Shatnawi, Dina, Ronald Oaxaca, and Michael Ransom. 2011. "Applying Fixed Effects to Hierarchical Segregation Models." American Economic Review, 101(3): 588-92.

DOI: 10.1257/aer.101.3.588

Abstract

This paper expands the empirical implementation of hierarchical segregation models to allow for the use of panel methods. We use firm level data collected between 1977 and 1985 from a regional grocery store that faced a title VII class-action lawsuit over gender discrimination much the same as Wal-Mart and Costco. Special problems arise in implementing decompositions in a fixed effects and random effects setting, especially when analyzing wage-level differences. We develop a variation of wage decompositions that takes into consideration an unbalanced design and extends the literature by explicitly formalizing the inclusion of the unobserved heterogeneous effects.

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Authors

Shatnawi, Dina (Naval Postgraduate School, Monterey, CA)
Oaxaca, Ronald (U AZ)
Ransom, Michael (Brigham Young U)

JEL Classifications

J16: Economics of Gender; Non-labor Discrimination
J31: Wage Level and Structure; Wage Differentials
J71: Labor Discrimination
J81: Labor Standards: Working Conditions