Endogenous schooling and the distribution of the gender wage gap

Previous studies on the gender wage gap have relied on OLS when estimating the wage equations. However, a number of recent studies, devoted to estimating the return to education, have shown that OLS may produce biased estimates for a number of reasons. As a consequence, previous results regarding the gender wage gap may also be biased. In this paper, we first estimate wage equations using a GMM procedure applied to panel data and then investigate the distribution of the gender wage gap. The results indicate that OLS may seriously overestimate the unexplained gender wage gap.First version received: October 2001/Final version accepted: July 2003     

A quantitative theory of the gender gap in wages

This paper measures how much of the gender wage gap over the life cycle is due to the fact that working hours are lower for women than for men. We build a quantitative theory of fertility, labor supply, and human capital accumulation decisions to measure gender differences in human capital investments over the life cycle. We assume that there are no gender differences in the human capital technology and calibrate this technology using wage–age profiles of men. The calibration of females assumes that children involves a forced reduction in hours of work that falls on females rather than on males and that there is an exogenous gender gap in hours of work. We find that our theory accounts for all of the increase in the gender wage gap over the life cycle in the NLSY79 data. The impact of children on the labor supply of females accounts for 56% and 45% of the increase in the gender wage gap over the life cycle among non-college and college females, while the rest is due to the exogenous gender differences in hours of work.     

Fertility Decisions and Gender Differences in Labor Turnover, Employment, and Wages

A striking observation of the U.S. and other labor markets is the weak position of women in terms of job attachment, employment, and earnings relative to men. We develop a model of fertility and labor market decisions to study the impact of fertility on gender differences in labor turnover, employment, and wages. In our framework, individuals search for jobs and accumulate general (experience) and specific (tenure) human capital when they work. They can also increase their wage by moving to a job of higher quality. Labor market decisions (e.g., job acceptance and job mobility) may differ across genders: females that give birth may decide to interrupt their labor market attachment in order to enjoy the value of staying at home with their children. The model economy is successfully calibrated to match aggregate statistics in terms of fertility, employment, and wages. We find that fertility decisions generate important gender differences in turnover rates, with long lasting effects in employment and wages. These differences in labor turnover account for almost all the U.S. gender wage gap that is attributed to labor market experience by Blau and Kahn (2000, Journal of Labor Economics15(1), 1–42). The model also implies a very small role of tenure capital in accounting for wage differences between males and females (gender gap), and between females with and without children (family gap). Journal of Economic Literature Classification Numbers: E24, J13, J21, J31.     

The Contribution of Intermittent Labour Force Participation to the Gender Wage Differential*

Despite equal pay decisions in 1969 and 1972 a gender wage differential of around 15 per cent exists in 1990. This paper uses information on the number of years worked from the 1984 National Social Science Survey to provide an understanding of the role of intermittent labour force participation in the wage determination process in Australia. Differences in years worked between males and females are shown to account for approximately 40 per cent of the gender wage gap. The analyses also reveal that males receive higher returns for each additional year of schooling than females     

Labor markets and mating markets: Using taxes to reduce the male–female pay gap

Recently, Frank and McKenzie (J Bioecon 8(3):269–274, 2006) pointed out that beside discrimination, there is a further reason for a wage gap between males and females: If females value partner wages more than males in the mating market, this would increase the pay gap. In this paper, it is analyzed whether there exist policies that may improve the position of females and males from a distributional point of view without destroying the signal females want about the labor market success of males. First-best redistribution policies require the knowledge of the male and female wage preferences. Because this information is not available, a first-best redistribution policy seems infeasible. As an alternative policy, a differentiated wage tax is considered which is less information demanding than a first-best policy. It is shown that a welfare increasing wage tax scheme does exist and that an adequately chosen wage tax scheme may decrease the gender wage gap without destroying the desired signal of wages for labor market success.     

COLLEGE MAJOR CHOICE AND CHANGES IN THE GENDER WAGE GAP

The distribution of college majors changed markedly between the 1970s and 1980s as fewer students completed degrees in low-skill fields such as education and letters and more graduated in high-skill fields such as engineering and business. This shift was most dramatic for females, who previously were concentrated in low-skill fields relative to those of males. This paper examines how this education-related skill upgrade, as represented by changes in the major distribution, affected the gender wage gap for college graduates during the 1980s. The results show that convergence in major distribution between males and females contributed to a decline in the gender wage gap for college graduates.     

The Male-Female Pay Gap Driven by Coupling between Labor Markets and Mating Markets

Synopsis Males often get paid more than females for the same work. This male-female pay gap has been observed throughout the world over many years. The most commonly cited explanations focus on gender oppression and workplace discrimination. We agree that discrimination contributes significantly to the pay gap; however, other factors may play important roles in how the sexes compete in the labor market. We use observations from psychology and concepts from biology to show how aspects of mate choice may influence labor markets. With a mathematical model, we analyze how mating preferences for partner wages affect the differences in wages between males and females, and in turn how wage differences affect mating preferences. If some extrinsic force, such as discrimination, creates an initial bias in wages, then coupled feedback between mating preferences and wages creates and maintains excess mating preference and wage biases. This model demonstrates how coupling between labor markets and mating markets can lead to outcomes that do not occur when analyzing either market in isolation from the other.     

Gender segregation and earnings differences in the Spanish labour market

This article analyses the effects of different types of gender segregation on the gender wage differential for the Spanish labour market. Matched employer–employee data from a sample of 226,535 workers are used. These workers are employed in 61 occupations within 26,492 establishments in 51 different industries. Workers belonging to the same industry, establishment or job share common factors which cannot be observed and these factors affect wages. If these unobservable variables are correlated with the explanatory variables, their estimated effects will be biased. For this reason, we estimate the effects of each type of gender segregation on the wage gap using a robust specification to these possible correlations. We obtain that industrial segregation by gender explains a lower part of the wage gap between men and women than previous researches found using standard regressions, while the contributions of establishment segregation and occupational segregation within each establishment are greater.     

Gender asymmetries: Impacts of an early‐stage school intervention in the Philippines

This paper examines long‐term impacts of improved school quality at the elementary school cycle on subsequent schooling investments and labor market outcomes using unique data from a survey that tracked nearly 3,500 former students in the Philippines. The Third Elementary Education Project (TEEP) intervention introduced a package of investments and management reforms at the school level, including classroom constructions, textbooks, teacher training, and school‐based management in the period of 2000 to 2006. The impacts on subsequent schooling investments and labor market earnings differ between females and males. The intervention significantly increased earnings among females, which reduced the existing wage gap by gender. However, the findings on schooling outcomes are mixed; the gender gap tended to widen, enhancing females’ existing relative advantage in schooling, though their impacts are insignificant for both females and males.     

Gender earnings inequality in the service and manufacturing industries in the U.S.

This paper compares earnings inequality between women and men in a growing sector of the U.S. economy – the service sector, and a shrinking sector – manufacturing. We examine the hypothesis that deindustrialization will reduce inequality, and find that the absolute magnitude of the gender earnings gap is, in fact, smaller in the service sector. Decomposition analysis is used to partition the gender earnings gap into three parts: (1) earnings differences due to differences in mean characteristics – such as education and experience; (2) earnings differences due to preferential treatment of men; and (3) earnings differences due to disadvantageous treatment of women. The latter two constitute estimates of gender discrimination. The results of this study suggest that, ceteris paribus, deirndustrialization will likely reduce the gender gap in hourly earnings. However, this will come at the cost of lower earnings for both males and females, with the drop in earnings being particularly large for males. While deindustrialization is predicted to reduce the absolute magnitude of male-female earnings inequality, evidence suggests that gender discrimination will persist – discrimination explains about 60 percent of the gender wage gap in both the service and the manufacturing sectors.     

Are children driving the gender wage gap?

We examine how much children and the responsibilities related to them contribute to the divergence of men's and women's wages, and consequently, to the formation of the gender wage gap. To derive the relative contribution of gender‐specific parent gaps to the overall gender wage gap, we provide a modification of the Oaxaca–Blinder decomposition and include simultaneous corrections for selection into employment and parenthood. The results show that the fatherhood wage premium contributes most significantly to the gender wage gap, especially in Poland. The motherhood penalty is also significant, while the role of the gender gap among childless individuals is small.     

The trend over time of the gender wage gap in Italy

We analyse gender wage gaps in Italy in the mid-1990s and in the mid-2000s. In this period, important labour market developments took place and they could have had a gender asymmetric impact on wages. We identify the time trends of different components of the gender wage gap across all the wage distribution. Although the unconditional gender wage gap remained roughly constant over time, we find that the component of the gap due to different rewards of similar characteristics deteriorated women’s relative wage. We show that especially women at the centre-top of the wage distribution swam against the tide: while the trend in female qualifications slightly reduced the gender wage gap, the gender-relative trends in the wage structure significantly increased it.     

中国城市劳动力市场上的性别工资差异

本文描述了中国城市劳动力市场上男女在行业获得和工资上的差异,并且用计量方法对工资差异进行了分解。分解结果表明,男女工资差异主要由同类行业内工资差异引起,而由于两者行业分布不同而带来的工资差异不大;歧视是造成性别之间的工资差异的主要原因,人力资本所起的作用很小。由此,缩小行业内的工资差异,消除对女性的歧视,是缩小工资性别差异的重要途径。     

The gender wage gap among recent post‐secondary graduates in Canada: a distributional approach

Using the National Graduates Survey, we examine the trends in the gender wage gap among recent post‐secondary graduates in Canada between 1988 and 2007. Female graduates earn on average 6–14% less than males during the period two to five years after graduation. Decompositions show that observable personal characteristics and job attributes can explain only a small portion of the wage gap. We also find that men earn more than women at every point of the distribution. Interestingly, the wage difference shrank in the lower half of the distribution in recent years, while it increased in the upper half.     

Male and Female Recoveries in Medical Malpractice Cases

This study analyzes male and female recovery resulting from medical malpractice injuries to discern the importance to the recovery differential of gender differences in recoveries for medical malpractice injuries. We find that the pattern of recoveries follows one similar to that found in studying wage differentials between males and females. Differences in the relative magnitudes of foregone earnings and nonmarket loses are reflected in the composition of recoveries. In addition, we find a recovery gap in which females receive substantially less in recoveries when they receive male's average compensation for medical malpractice injuries. However, only a small portion of the male and female recovery differential is explained by the characteristics of the claims, leaving a substantial portion of the differential unexplained.     

REMOVING THE “VEIL OF IGNORANCE”: NONLINEARITIES IN EDUCATION EFFECTS ON GENDER WAGE INEQUALITIES

A large literature studies the mean gender wage gap in developing countries and finds mixed evidence about the role of education policies in closing gender earnings inequalities. We contribute to this literature by exploring two types of nonlinearities in wage earning regressions: (1) nonlinearities on the effects of education on expected earnings along the distribution of education endowments; and (2) heterogeneities on the contributions of education to the gender wage gap at different quantiles of the wage distribution. Our analyses provide new insights on how these nonlinear effects can be used to set up better targeted gender and development policies. (JEL I26, C14)     

Gender wage differentials by education in Italy

In this article we evaluate wage differentials in Italy combining gender and education perspectives. The main goal of this article is to verify whether the extent of the gender pay gap varies between highly- and low-educated workers, and whether or not the role played by gender differences in characteristics and in market rewards is similar in the two groups. We apply quantile regression analysis and an adaptation of the procedure suggested by Machado and Mata (2005) to evaluate the predicted wage gap at different points of the female wage distribution scale. The analysis is carried out on the Italian sample of the last available year of the European Community Household Panel (ECHP). We show that the extent and the trend of the gap predicted across the female distribution is sharply different between groups with diverse educational levels. In the case of low-educated workers, although the predicted gap is largely explained by differences in rewards, lower levels of education or experience are responsible for the gap, especially on the right-hand side of the distribution. On the contrary, highly-educated females have better characteristics than highly-educated men that partially compensate the rather high difference in returns, in particular at the extremes of the distribution.     

Investment in human capital and gender wage differences: evidence from the NLSY

This paper uses data from the National Longitudinal Survey of Youth (NLSY) to investigate gender differences in returns to various forms of human capital. Since the NLSY includes relatively detailed information regarding on- and off-the-job training, we place special emphasis on measuring gender differences in the incidence of and returns to formal post-school training. Also considered is the role of nonhuman capital factors such as industry and occupation in explaining the wage gap. It is found that about 60% of the gender wage gap in the sample is explained by mean differences in individual characteristics and market circumstances. This suggests a smaller role for discrimination in explaining the wage gap than previous research has found. The research indicates that training does not affect the gender wage gap. Also it is found that there is no statistically significant difference in the rate of return to other measures of human capital for women versus men. Our research suggests that the largest factors contributing to the wage gap are differences in the stocks of human capital for men and women, and differences in the distributions of men and women across industries and occupations.     

Gender Wage Differentials and Occupational Segregation in Hong Kong, 1981–1996

This paper analyses gender wage differentials and the role of occupational segregation in Hong Kong. It is found that the female–male earnings ratio increased substantially from 0.710 in 1981 to 0.839 in 1996. A decomposition which takes into account occupational differences shows that the gender pay gap is mostly within occupations and most of the intra‐occupation wage gap is unexplained. The gender pay differential due to occupational differences is small; in fact, the overall occupational segregation favours females in Hong Kong.