||Under competitive labor markets, workers should be paid according to their productivity,
regardless of other personal characteristics. This, however, is not the case and has been
widely reported in the literature. This paper reviews empirical evidence and methods of
estimation for sectoral wage differentials. Moreover, it shows estimates of such
differentials for the United States using CPS data from 1968 to 2008. The presence of
industry wage differentials is certain, although under certain econometric techniques, its
magnitude is reduced in favor of unobserved worker and firm characteristics.