The unconditional quantile regressions are complemented by conditional quantile regressions (Koenker and Basset, 1978). While this technique has been widely used in empirical applications - in contrast to the unconditional quantile regression technique which is still fairly new - it does not allow drawing conclusions about the impact of a variable on overall earnings inequality but rather provides insights about the dispersion of earnings within different subgroups of the population. To complete the analysis, the unconditional quantile regression results are used to decompose cross-country differences in the level of earnings inequality into differences in population characteristics (e.g. education) and differences in the returns to these characteristics (e.g. returns to education). This decomposition helps to get a better understanding of cross-country differences in earnings inequality.