Gender wage gap: A semi-parametric approach with sample selection correction

Sizeable gender differences in employment rates are observed in many countries. Sample selection into the workforce might therefore be a relevant issue when estimating gender wage gaps. We propose a semi-parametric estimator of densities in the presence of covariates which incorporates sample selection. We describe a simulation algorithm to implement counterfactual comparisons of densities. The proposed methodology is used to investigate the gender wage gap in Italy. We find that, when sample selection is taken into account, the gender wage gap widens, especially at the bottom of the wage distribution.     

The effect of activation on the post-activation civilian earnings of reservists

To fight wars in Iraq and Afghanistan, the Department of Defense has relied heavily on its reserve components. Among the hardships of activation is the possibility that reservists might suffer an earnings loss following their period of active-duty service due to difficulties reentering the civilian labor market. This paper reports estimates of the effect of activation on the post-activation civilian earnings of reservists employing administrative data on earnings and periods of activation. Our results indicate that reserve activations lead to moderate losses in civilian earnings in the year immediately following activation that disappear and turn to earnings gains in subsequent years.     

Human Capital Spillovers within the Workplace: Evidence for Great Britain*

In this paper, we use a unique matched worker–workplace data set to estimate the effect on own earnings of co‐workers’ education. Our results, using the 1998 GB Workplace Employee Relations Survey, show significant effects. An independent, significantly positive effect from average workplace education is evident; own earnings premia from years of education fall only slightly when controlling for workplace education. This result suggests that the social returns to education are strongly positive – working with colleagues who each had 1.2 years (1 standard deviation) of more education than the average worker, boosts own earnings by 11.1%. An additional year of any single co‐worker's education is worth about 3.2% of an additional own year of education. We also test for interactions between own and co‐worker education levels and for ‘skills incompatibility’ when worker education levels are heterogeneous. The interactions appear negative: own education is not much valued at workplaces where co‐workers’ education levels are already high. There is no evidence that workplace heterogeneity in worker education levels adversely affects own earnings. This result runs counter to theoretical predictions, and suggests that workers compete in tournaments for high‐paying jobs.     

Education,Occupation and Career Expectations: Determinants of the Gender Pay Gap for UK Graduates*

Despite anti‐discrimination policies, women are paid 20% less then men in the UK. A large proportion of this wage gap is usually left unexplained. In this paper, I investigate whether the unexplained component is due to mis‐specification. Using a sample of recent UK graduates, I examine the role of choice variables (subject of study and occupation) as well as career expectations and aspirations. The evidence indicates that women are more altruistic and less career‐oriented than men. Career break expectations, for example, explain 10% of the gender wage gap in the favoured model. By omitting attitudinal variables, most studies are likely to overestimate the unexplained component of the gender wage gap. Women with a more traditional view concerning childrearing are also found to have less intensive search behaviour. Since aspirations may reflect perceived discrimination or social pressure, current legislations are unlikely to reduce the gender wage gap.     

The effect of college curriculum on earnings: An affinity identifier for non-ignorable non-response bias

We link information on graduates from many cohorts to their high-school and college records and demographics to infer the impact of college major on earnings. We develop an estimator to handle potential non-response bias and identify non-response using an affinity measure—the potential respondent’s link to the survey organization. This technique is generally applicable for adjusting for unit non-response. In the earnings model estimated using the identified (for non-response bias) selectivity adjustments, adjusted earnings differentials across college majors are below half as large as unadjusted differentials and ten percent smaller than those that do not account for selective non-response.     

The impact of computer use on earnings in a developing country: Evidence from Ecuador

This paper examines the earnings premium to computer use in a developing country: Ecuador. We use different approaches to examine whether the premium is causal. Controlling for an extensive set of observables, we find an earnings difference between users and non-users of around 20%. Using first differences, the premium drops and is no longer significant in a specification that includes proxies for workers' computer experience and knowledge. Estimates of the impact of the intensity of computer use are also small and in most cases insignificant. Estimates of the pencil premium are substantial in level specifications, but become insignificant in fixed effect specifications. Taken together, also in the setting of a developing country we do not find evidence in favour of the computer premium reflecting a causal impact.     

Gender differences in competitiveness: Empirical evidence from professional distance running

A large body of literature documents the existence of a considerable and persistent gender gap in competitiveness. Using longitudinal data from professional distance running covering a period of nearly 40 years (1973-2009) I first confirm the findings of most previous studies by demonstrating that on average the women's races were - for most years - indeed less competitive than the men's contests. Closer inspection of the data, however, reveals that the women's races over distances with large amounts of prize money and/or prestige at stake (5000 m track, 10,000 m road, half marathon, and marathon) have always been particularly “balanced”. Moreover, although it still exists, the gender gap has considerably narrowed over the years. These findings are not compatible with the hypothesis that gender differences in competitiveness reflect evolved biological differences and/or psychological predispositions. It is, however, compatible with two other (complementary rather than substitute) hypotheses: due to changing socio-cultural conditions boys and girls are today socialized similarly in many parts of the world and due to the increasing returns to success (i.e. identical prize money levels and distributions) women are nowadays motivated to train as hard as comparably talented men.     

Prejudice and gender differentials in the US labor market in the last twenty years

Earnings differentials between men and women have experienced a stable convergence during the 1980s, following a process started in the late 1970s. However, in the 1990s the convergence has almost stopped. The first objective of the paper is to evaluate if discrimination, defined as explicit prejudice, may have a role in explaining this slowdown in the convergence. The second objective is to assess whether the prediction of a decrease in the proportion of prejudiced employers implied by the Becker’s model of taste discrimination is taking place and if so at what speed. These objectives are achieved by developing and estimating a search model of the labor market with matching, bargaining, employer’s prejudice and worker’s participation decisions. The results show that the proportion of prejudiced employers is estimated to be decreasing at an increasing speed, going from about 69% in 1985 to about 32% in 2005. Therefore prejudice is not estimated to be a relevant factor in explaining the slower convergence between male and female earnings in the 1990s. The results are consistent with the Becker’s model of taste discrimination if one is willing to assume a very slow adjustment process.     

Tied Migration and Subsequent Employment: Evidence from Couples in Britain*

We use unique information on migration behaviour and reasons for migration to study the impact of tied migration on labour market outcomes among husbands and wives. Fewer than 2% of couples migrate for job‐related reasons and the majority of these move for reasons associated with the husband's job. Estimates from dynamic random‐effects models indicate that husbands and wives in couples that migrated for job‐related reasons suffer lower job retention rates than non‐migrants. Tied migration reduces the probability of subsequent employment for both husbands and wives and in particular has a large negative impact on job retention rates among wives.     

Male-female earnings differentials among lawyers in Britain: a legacy of the law or a current practice?

On average, female solicitors earn only 56 per cent as much as men. An historical underrepresentation of women in the profession, differences in preferences and discrimination are the most frequently quoted explanations. The data cover private practice solicitors in Britain and are unusual in two respects: hours of work are distinguished by whether or not they are billed to clients and periods of parental leave are recorded. We find that a significant part of the pay-gap is due to women's limited access to partnership status and lower earnings growth once promoted. Fewer hours worked and billed and lower postqualification experience are also important. The results presented are consistent with labour market models that emphasise end-load compensation incentive systems where the extent to which compensation is deferred is greater for women.     

The demand for deductibles in private health insurance: A probit model with sample selection

In this paper we analyse the decision to prefer a health insurance with a deductible to one with complete coverage. We focus on health, medical consumption, and on socio-economic characteristics like age, income, education and family size. The analysis is based on a sample of 8000 privately insured families; about 60 percent of them did not wish to have a health insurance policy with a deductible. A corrective method for sample selectivity, analogous to Heckman's (1979) method, has been applied in probit analysis; the estimation results are compared with the maximum-likelihood estimates. Health, medical consumption and income are found to have a significant influence on the decision with respect to the type of insurance. Our results give an indication of the degree of adverse selection that may take place if health insurance policies are offered with the option to take a deductible in exchange of a premium reduction.     

Language usage,participation, employment and earnings: Evidence for foreigners in West Germany with multiple sources of selection

Language proficiency may not only affect the earnings of the individual, but the probability to participate in the labor market or becoming employed as well. It may also affect selection of people into economic sector and occupation. In this paper, the effects of language proficiency on earnings are analyzed for foreigners in Germany with joint consideration of up to four types of selection. The results show that language proficiency significantly increases participation and employment probability and affects occupational choice. When selection into economic sector and occupation is regarded, we do not find an impact of language ability on earnings thereby implying an indirect effect.     

Gender identity inclusion in the workplace: broadening diversity management research and practice through the case of transgender employees in the UK

Based on 14 in-depth interviews, this paper explores the unique workplace experiences of transgender individuals in the UK employment context. The paper identifies gender identity diversity as a key blind spot in HRM and diversity management research and practice. The findings reveal the range of workplace challenges experienced by transgender employees. Major findings are that discriminatory effects are often occupation- and industry-specific; transition is a period where many transgender workers suffer due to lack of proper organisational support; and expertise deficits exist in supporting and accommodating transgender employees' needs. In unpacking these experiences, the paper demonstrates the distinctive dimensions of challenges faced by transgender employees, revealing the need for conceptually expanding how we frame diversity and diversity management. Our findings identify the necessity for an emic approach not only to researching diversity but also to devising organisational diversity strategies. The paper provides recommendations for HRM policy and practice in order to develop a more sophisticated approach to achieving inclusion.     

Barriers to employee rights: Gender,selection, and the labor process

This article applies a labor process analysis to the issue of employment rights in the particular context of gender inequality and unlawful discrimination in the recruitment process. It criticizes conventional perspectives on employee rights for their failure to examine critically managerial power and prerogative and its implications for gender inequality. The article outlines two particular labor process theories of gender divisions and inequality. In exploring the strengths and weaknesses of these more critical perspectives, the article highlights the analytical significance that they ascribe to power asymmetries in the labor process and labor market. Building on this perspective, the analysis then presents empirical data on gender discrimination in the selection practices of contemporary UK organizations. The research material reveals how gender discrimination can be reproduced, rationalized, and resisted. These empirical findings are theorized through a combined labor process analysis of power, knowledge, and identity in recruitment practices. We conclude that labor process analysis facilitates our understanding of the deep-seated barriers that continue to impede the protection of employee rights in workplace practices.     

The nonrandom selection of don't knows in binary and ordinal responses: Corrections with the bivariate probit model with sample selection

On social surveysdon't knows are a common answer to attitudinal questions, which often have binary or ordinal response categories.Don't knows can be nonrandomly selected according to certain demographic or socioeconomic characteristics of the respondent. To model the sample selection and correct for its bias, this paper discusses two types of bivariate models —binary-probit and the ordinal probit model with sample selection. The difference between parameter estimates and predicted probabilities from the analysis modelling the sample selection bias ofdon't knows and those from the analysis not modellingdon't knows is emphasized. Two empirical examples using the 1989 General Social Survey data demonstrate the necessity to correct for the bias in the nonrandom selection ofdon't knows for binary and ordinal attitudinal response variables. A replication of the analyses using the 1990 and 1991 General Social Survey data helps demonstrate the reliability of the sample selection bias ofdon't knows.     

The skill profile of the employees and the provision of flexible working hours in the workplace: a multilevel analysis across European countries

This article investigates the relationship between the skill profile of the employees (i.e. the percentage of employees in highly skilled jobs) and the provision of flexible working hours in the workplace (i.e. the proportion of employees entitled to adapt, within certain limits, the time when they begin or finish their daily work according to their personal needs or wishes). Analyses draw on the 2009 European Company Survey, conducted on a representative sample (N = 26,640) of European establishments in 29 countries. Multilevel mixed‐effects linear regressions are used to study to what extent both workplace‐level and national‐level variables affect this relationship. Findings suggest a strong, positive and non‐linear relationship between the variables under scrutiny, which is moderated, at national level, by both unemployment and trade union density rates.     

Seniority Profiles in Unionized Workplaces: Do Unions Still have the Edge?*

The focus of this study is to distinguish the different paths seniority earning profiles follow depending on whether the individual is employed in a workplace where trade unions and collective bargaining are present, or not. Within this framework, two propositions are set. In the union sector seniority should be an important determinant of wages, while in the non‐union sector productivity, proxied by occupational experience, should have a key role on earning profiles. The empirical analysis verifies both propositions. Seniority earning profiles appear to be steeper in the union sector, while occupational expertise is estimated to have a more significant role in non‐union jobs.