WAGES DIFFERENTIAL IN YOUTH EMPLOYMENT IN THE NORTHEAST REGION: IS THERE A GENDER AND RACE SELECTION BIAS BY SECTOR?

Abstract

This study presents the salary differential among young people from the Northeast in four sectors, such
as: industry, commerce, services and domestic to verify gender and/or race selection bias in these sectors. For
such, microdata reported by National Continuous Household Sample Survey (PNADC) for 2019 are used through
a Probit model corrected by the Heckman (1979) method and Oaxaca-Blinder (1973) wage decomposition. The
results shown high informality in the young population, low salary levels with differences between activities.
Besides, the domestic employment had the lowest formality rate and the service sector highest level of education
and income. When Heckman model was using, the wage discrimination within the activity presents a reduction
in wages among females and non-whites in the industrial and services sectors. The expansion of this inequality is
seen in the Oaxaca-Blinder decomposition when comparing women and men between different sectors, with emphasis on the activities of industry and services; and services, the latter being the one with the greatest amplitude
in the wage gap