Third-generation mexican american workers in the south-west: a case of wage discrimination

This paper studies the wage gap between third-generation Mexican American and non-Hispanic white workers in the South-West. I develop a generalized version of Oaxaca wage gap decompositions that can be applied to nomparametric and semiparametric tree structures. The best model in terms of the test sample mean square error is the nomparametric one. This model assigns most of the observed wage gap to three equally important effects: selection bias in the sample, ethnic segregation, and workers' characteristics