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This paper analyzes the wage gap between non-indigenous peoples and Mapuches in Chile. This gap is broken down into endowment and discriminatory components. Participation and wage equations are estimated by gender and ethnic group and the results are controlled for sample selection bias. The results show significant differences in endowments that favor the non-indigenous peoples, both male and female. The hypothesis of discrimination against Mapuches cannot be rejected for males, but it can for females. However, male discrimination did not increase between 2000 and 2006. The results suggest that a policy directed at reducing wage differences by increasing human capital among the Mapuches might have ambiguous effects and that the labor market generates incentives for the Mapuches to migrate to the cities. [ABSTRACT FROM AUTHOR]

This paper presents empirical evidence on the existence of wage discrimination concerning indigenous population in Chile in the period 1996-2006, using data from the Casen survey. The results show that wage discrimination has remained stable during the last ten years (12%). Using bootstrapping techniques it is possible to construct a confidence interval for the wage discrimination measure, which allows to conclude that it is statistically significant. On the other hand, in the same period, the wage gap dropped from 32.5% to 24.9%, this decline is basically explained by the leveling of human capital endowment between the two groups. The estimations are sensitive to the correction for selection bias, which points out the relevance of including this variable in the wage gap decomposition. [ABSTRACT FROM AUTHOR]