Wage determination and the gender pay gap: A feminist political economy analysis and decomposition

Abstract

This paper develops a heterodox analytical framework of wage determination and a new method of decomposition of the gender pay gap drawing on Marxian and feminist theories. The proposed framework utilizes two wage equations for the analysis of the gender gap: the first equation refers to average occupational wages and the second to individual wages as deviations from occupational wages. Using a data set for wages from industries in Greece, this paper demonstrates and explains differences in results between this proposed decomposition of the gender pay gap and that of Oaxaca-Blinder, and discusses the merits of this new technique compared to the Brown-Moon-Zoloth method. The authors argue that the main advantage of this proposed method of decomposition over the other two methods is that the proposed method allows for separate estimates of the impact of social and individual gender wage discrimination on the gender pay gap.     

Gender wage differentials and discrimination in Korea: comparison by knowledge intensity of industries

This study estimates the relative size of the non-productivity-related gender wage gap across industries with differing knowledge intensities. More specifically, a gender wage premium was estimated from a modified Mincerian earnings equation, and an Oaxaca's discrimination coefficient was computed. Empirical evidence indicates that gender wage differentials tend to be less subject to potential discrimination in knowledge-based industries than in other industries with lower knowledge intensity. The estimated discrimination effect is least noticeable in top hierarchical occupations such as professionals and technicians, while it is most sizeable in production workers and sales/service workers, regardless of industrial affiliation.     

Trade Liberalization and Gender Wage Inequality in Mexico

Abstract

After twenty years of trade liberalization in Mexico, the relationship between gender wage inequality and trade remains insufficiently studied, in spite of evidence of increasing numbers of women in industrial employment. This study aims to analyze the effects of export orientation and other characteristics that represent the industrial underpinnings of restructuring on gender wage inequality for 2001–5. There is consistent evidence of the negative impact of export orientation on men's and women's wages and the gender wage ratio, signifying that women lose in both absolute and relative terms. This result holds after controlling for women's share of employment and the skills of both genders, contrary to the expected effect from trade on equality. There is also a negative relation between a rise in the proportion of unskilled workers and the gender wage ratio, which suggests that the trade-induced skill hypothesis cannot be considered an adequate explanation for gender inequality.     

Decomposing growth in the gender wage gap in urban China: 1989–2011

This paper examines trends in the gender wage gap observed in urban China during the post‐reform era. Using China Health and Nutrition Survey data, changes to the gap between 1989 and 2011 are analyzed using the Wellington decomposition method. While women's gains in observed characteristics have narrowed the wage gap, they are more than offset by changes in the returns to these characteristics. Men's returns to potential labour market experience have grown particularly rapidly, relative to women's, and this represents the single largest contributing factor towards the widening of the gender wage gap. Further investigation explores gender wage patterns through the dimensions of occupation, ownership sector and birth cohort. Taken together, my results raise concerns that China's urban labour market may increasingly disincentivize women's long‐term labour force attachments.     

Male–female wage discrimination in Chinese industryInvestigation using firm‐level data1

We use firm‐level data to analyze male–female wage discrimination in China's industry. We find that there is a significant negative association between wages and the share of female workers in a firm's labour force. However, we also find that the marginal productivity of female workers is significantly lower than that of male workers. Comparing wage gaps and productivity gaps between men and women, we notice an intriguing contrast between state‐owned enterprises (SOEs) and private firms. The wage gap is smaller than the productivity gap in SOEs, while the converse is true for private firms. These results suggest that women in the state sector receive wage premiums, whereas women in the private sector face wage discrimination.     

How do Labor Unions Influence the Gender Earnings Gap? A Comparative Study of the US and Korea

Abstract

This paper provides a comparative study of the United States and Korea regarding the effects of unions on gender earnings gaps in 2004. Using datasets representative of the population of the US and Korea, this contribution shows that gender differences in the workers' observed characteristics and the unobserved component reduce gender earnings gaps in union jobs in both the US and Korea. Fringe benefits in the union sector attract women workers with higher labor market qualifications into the union sector and thereby reduce the gender earnings gap in this sector. The study finds that this self-selection process in the union sector is stronger in Korea than in the US, but the seniority-based wage system that prevails in the Korean union sector widens the gender earnings gap.     

Technological and Organizational Change and the Employment of Women: Early Twentieth-Century Evidence from the Ohio Manufacturing Sector

Abstract

Using a data set that tracks the employment and wages of male and female production and clerical workers in Ohio from 1914 to 1937, this study finds that among manufacturing establishments, female employment and real wages rose rapidly throughout this period, particularly within clerical occupations. There were also substantial increases in the proportion of women in Ohio's manufacturing workforce, and women's wage increases kept pace with those of men. After matching the employment and wage data to input and output data from Ohio's manufacturing census, the study estimates the parameters for industry group translog production functions. The estimates indicate that Ohio's manufacturers adopted new organizational structures and technologies that favored an increasingly intensive use of female clerical labor. The study performs a counterfactual exercise that illustrates the extent to which non-neutral technological and organizational changes over this period explain the observed increases in the employment and remuneration of female clerical workers.     

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.     

Economic transition and gender differentials in wages and productivity: Evidence from Chinese manufacturing enterprises

We use firm-level data to analyze male–female wage differences in Chinese industry in the late 1990s. Our estimates indicate that employers' discrimination against women was not a significant source of the gender wage gap in Chinese state-owned enterprises. Instead, we find that the relative wage of unskilled female to male workers was higher than their relative productivity. This result indicates that unskilled female workers in the state sector had historically received wage premiums and consequently accounted for a disproportionate share of the sector's labor surplus.     

Women's gender-type occupational mobility in Puerto Rico, 1950 — 80

Abstract

This paper investigates the patterns and determinants of women's mobility into and out of male-dominated occupations in Puerto Rico during a period of rapid development between the 1950s and the early 1980s. The paper uses data from the Puerto Rico Fertility and Family Planning Assessment of 1982, which includes detailed retrospective calendar histories of women's employment and other life-course changes. An event history approach allows an examination of the effects of human capital, family status, socialization, and opportunity structure in the labor market on women's entry into male-dominated occupations and their subsequent shifts to other occupations. The findings indicate that women's entry into male-dominated occupations increased for first jobs during this period of economic development, and there was modest cross gender-type mobility among women who experienced job changes. Finally, the variables more directly tapping labor-supply factors show stronger effects on women's labor-force behavior than those more directly tapping labor-demand factors.     

Sources of crime in the state of Veracruz: The role of female labor force participation and wage inequality

Abstract

In recent years, crime has become a serious concern in Mexico as its increase has detrimentally affected government institutions and economic growth. There is considerable speculation among policy analysts about the causes of the increase in crime. Whereas some analysts attribute the increase to a rise in income inequality, others believe internal migration and a loss of morals are the roots of criminal behavior. This research shows that at least for the Mexican state of Veracruz, wage inequality and labor force participation have an important impact on crime. When gender is considered, however, the impact is more complicated than it seems. An increase in women's labor force participation decreases the overall number of alleged violent offenders. However, the number of alleged rapists and grievous bodily harm offenders increases as women's wage distribution improves. The results shed light on the gender dimensions of the economics of crime.     

Wage Determination in Rural Russia: A Stochastic Frontier Model

This article examines wages in rural Russia after the first decade of economic transition using data from a nationally representative household survey. The stochastic frontier analysis reveals that Russia's rural labour markets place high value on human capital. The overall level of rural wages, however, is very low, with the median wage 10% below the official subsistence level. The gender pay gap severely depresses women's wages. A woman with the same skills as a man is paid only 47% of the man's wage. Rural workers who receive income from their personal plots accept significantly lower wages. Private firms pay considerably higher wages than state or collectively owned firms, but account only for one fifth of rural workers.     

Public Sector Employment,Wage Inequality and the Gender Pay Ratio in the UK

This paper assesses the relative contributions of the different systems of pay determination in the private sector and the public sector toward the changing level of wage inequality and the gender pay ratio in the UK. The greater centralisation of pay arrangements in the public sector compared with the private sector in the UK suggests that public sector employment may have acted to offset the widening wage inequality seen in recent years, as well as making an important contribution to the increase in women's relative average earnings compared to men. This issue is addressed by drawing on unpublished occupational hourly earnings data from the New Earnings Survey and applying decomposition of the Theil index of wage inequality to analyse both static and dynamic trends. The change in wage inequality for the period 1986 to 1995 primarily reflected the change in wage dispersion within the private sector, and the narrowing of the gender pay gap among the public sector workforce was an important factor in explaining the overall improvement in women's relative earnings. The paper argues that the relatively centralised pay arrangements in the public sector, compared with the private sector, played an important role in slowing the increase in wage inequality and narrowing the gender pay gap. As such, future policies to decentralise pay determination in the UK public sector may exacerbate the increasing level of wage inequality and reverse women's recent relative pay improvements.     

Understanding the gender wage-gap differential between the public and private sectors in Italy: A quantile approach

This paper analyzes the gender-based wage gaps across the wage distribution in the private and public sectors in Italy for the years 2005–2010. We use quantile regression methods to estimate and decompose the wage gap at all wage levels and propose a two-step procedure that relies on a novel approach to estimating fixed effects quantile regressions. The method's main advantage is that it allows the employment sector's marginal effect on wages at various points of the distribution to be estimated, while accounting for both observable and time-invariant unobservable factors. The new method stresses important differences with respect to standard decomposition analyses and amplifies the differences in the two sectors' wage-setting mechanisms. When the estimation is net of individual heterogeneity, the gender-based wage gap decreases in both sectors and there is evidence of a glass ceiling effect, but only in the public sector. Economic grounds are provided.     

Flexibility for Whom? Control over Work Schedule Variability in the US

Abstract

According to the May Work Schedules and Work at Home Supplement of the Current Population Survey in 1997, 2001, and 2004, the proportion of employees in the United States with variable starting and/or stopping times who do not control their schedules has increased rapidly since the late 1990s. This category included one out of nine civilian employees ages 18–65 in 2004. These jobs have increased rapidly within industries and occupations. The incumbents of these jobs are more likely to be men, black, and immigrant; white, US-born women' chances of holding such jobs are greatly reduced by their responsibility for children. These findings identify a growing tendency to structure jobs so as to exacerbate the conflict between family work and paid employment, and to reinforce the gender division of labor between home and wage labor, especially in the most disadvantaged communities within the US.     

The Effects of Gender Differences in Career Interruptions on the Gender Wage Gap in Spain

The aim of this paper is to measure the influence of past employment interruptions on current wages and to analyze how these interruptions contribute to the gender wage gap. The discontinuity in labor trajectories of Spanish employees from 2005 to 2010 is examined by measuring the duration of unemployment periods from employees’ first Social Security affiliation to the last job at which they were employed. Through the use of the database “Muestra Continua de Vidas Laborales” (MCVL), the estimated gender wage gap is found to be 13.1 percent. Introducing an index of interruptions as an explanatory variable, the results show that interruptions have a negative impact on both men's and women's wages. These interruptions explain 7.4 percent of the daily gender wage gap in Spain, primarily because women experience more interruptions in employment than men.     

Why do women still earn less than men? Decomposing the Dutch gender pay gap, 1996–2006

Despite major improvements in women's labour market attachment, women still earn considerably less than men. International research shows that the persistence of the gender pay gap may be due to the fact that although the gap in characteristics between men and women is diminishing, changes in the wage structure counteract this change. This article will study whether this ‘swimming upstream’ phenomenon is also playing a role in the rather slow convergence between male and female wages in the Netherlands. Our results indicate that this is not the case; most of the changes in the Dutch wage structure have been rather favourable to women. The lacking convergence in wages has to be explained from the fact that despite the favourable changes, the Dutch wage structure still contains a considerable implicit gender bias.     

The Gender Pension Gap in China

ABSTRACT

China has had a large gender gap in labor force participation, sectors of employment, and earnings. This study shows that disadvantages in the labor market for women are the primary drivers of the gender pension gap. Among people age 60 and older, women receive about half of the amount of men's social pensions. Using the 2013 wave of China Health and Retirement Longitudinal Study (CHARLS) and the CHARLS Life History Survey of 2014, this contribution has three main findings. First, about three-quarters of the deficit in women's pensions is explained by women's lower likelihood of receiving occupational pensions, and one-third is due to smaller benefits when they do receive them. Second, the gender deficit in receiving an occupational pension can be explained by education level and employment sector. Third, among pension recipients, nearly one-third of the gender benefit gap is explained by women's fewer years of employment and lower salaries.     

Segregation and gender wage gaps in the private and the public sectors: an analysis of Danish linked employer–employee data, 2002–2012

This paper examines the relation between segregation and the gender wage gap in the public and the private sectors in Denmark from 2002 to 2012. The analysis shows that male–female differences in the share of females in occupations, industries, establishments and job cells (occupations within establishments) constitute 46 % of the raw gender wage gap in the private sector, while segregation in the public sector accounts for as much as 63 %. Segregation thus plays a substantially more important role in accounting for the gender wage gap in the public sector than in the private sector. While the importance of segregation for wage formation decreased substantially in the public sector over time, it only decreased slightly in the private sector. Although the remaining gender wage gap, after controlling for segregation, is close to zero in the public sector, a substantial within-job cell differential remains after controlling for segregation in the private sector.