Exploring the Urban-Rural Labor Income Gap in Uruguay: A Quantile Regression de Composition

Marcelo Bergolo; Fedora Carbajal

doi:10.4067/S0718-88702010000200006

Authors

Marcelo Bergolo CEDLAS, Universidad Nacional de La Plata and CONICET
Fedora Carbajal CEDLAS, Universidad Nacional de La Plata and CONICET

DOI:

https://doi.org/10.4067/S0718-88702010000200006

Keywords:

Urban-rural gap, labor income, quantile regression decomposition, Uruguay

Abstract

This paper analyzes the differences in real hourly labor income (RHLI) distributions between urban and rural workers for Uruguay in 2006. A quantile regression decomposition technique is applied in order to examine the urban-rural gap across the entire RHLI distribution. The urban-rural gap was primarily explained by the differences in the distribution of covariates along the entire distribution. Differences in distribution of returns favored the rural workers in most of the RHLI distribution although its contribution decreased across quantiles. The resulting gap in returns was most relevant for the worst off rural workers compared to the urban counterparts in both Montevideo and the rest of the urban centers.

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