We employ CPS data to analyze the sources of hourly real wage changes in the United States for 1976 to 2016 at various quantiles of the wage distribution. We account for the selection bias from the  annual hours of work decision by developing and implementing an estimator for nonseparable selection models with censored selection rules. We then decompose wage changes into composition, structural and selection effects. Composition effects have increased wages at all quantiles but the patterns of wage changes are generally determined by the structural effects. Evidence of changes in the selection effects only appear at  lower quantiles of the female wage distribution. The combination of these various components produce a substantial increase in wage inequality . This increase has been exacerbated by the changes in females' working hours .
We analyze the sources of changes in the distribution of hourly wages in the United States using CPS data for the survey years 1976 to 2016. We account for the selection bias from the employment decision by modeling the distribution of annual hours of work and estimating a nonseparable model of wages which uses a control function to account for selection. This allows the inclusion of all individuals working positive hours and thus provides a fuller description of the wage distribution. We decompose changes in the distribution of wages into composition, structural and selection effects. Composition effects have increased wages at all quantiles but the patterns of change are generally determined by the structural effects. Evidence of changes in the selection effects only appear at the lower quantiles of the female wage distribution. These various components combine to produce a substantial increase in wage inequality .
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employ CPS data to
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hourly real wage
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United States for
distribution of hourly wages in the United States using CPS data for the survey years
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2016 at various quantiles of the wage distribution.
2016.
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employment decision by modeling the distribution of
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decision by developing and implementing an estimator for nonseparable selection models with censored selection rules. We then decompose wage changes
and estimating a nonseparable model of wages which uses a control function to account for selection. This allows the inclusion of all individuals working positive hours and thus provides a fuller description of the wage distribution. We decompose changes in the distribution of wages
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wage changes
change
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the
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The combination of these various components
These various components combine to
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. This increase has been exacerbated by the changes in females' working hours