The role of the firm in worker wage dispersion: an analysis of the Ghanaian manufacturing sector

IZA Journal of Labor & Development

Table 4 Contribution of earnings gap to variance in earnings

	(1)	(2)	(3)
Panel A	1992	1998	Change
Variance (log real hourly earnings)	1.105	1.376	0.271
Mean (log real hourly earnings) above 90th percentile	5.988	6.488
Mean (log real hourly earnings) below 90th percentile	4.339	4.350
Difference in means (above–below 90th percentile)	1.649	2.138
Contribution of difference in means to variance	0.245	0.411	0.166
Percentage of total change in variance			61.25
Panel B	1998	2003	Change
Variance (log real hourly earnings)	1.376	1.067	−0.309
Mean (log real hourly earnings) above 90th percentile	6.488	7.036
Mean (log real hourly earnings) below 90th percentile	4.350	4.974
Difference in means (above–below 90th percentile)	2.138	2.062
Contribution of difference in means to variance	0.411	0.383	−0.028
Percentage of total change in variance			9.06

Data from CSAE-RPED on the Ghanaian manufacturing sector from 1992 to 2003. The contribution of the difference in means has been calculated as per the description in Section 3.2 in the text. The variance in log earnings can be arithmetically decomposed following Barth et al. (2014) as in Eqs. (2) and (3) to calculate the contribution to variance. The percentage share has been calculated as the change in the contribution as a share of the total change in the variance