Occupational assignment,hiring discrimination,and the gender pay gap

An identified, structural demand-wage equation is estimated using endogenous indicators for working part-time and occupational assignment. The wage equation is estimated by two-stage and ordinary least squares, and the pay gap is decomposed into explained and residual parts. Measures of gender-based wage discrimination are estimated after making adjustments to account for hiring discrimination and occupational preferences. The evidence indicates that gender differences in preferences for occupation explain much of the gap, yet there is still evidence of hiring discrimination. As a percentage of male wages, the discriminatory gap adjusted for hiring discrimination lies between 10.5 and 13.5 percent when estimated by ordinary least squares, and between 2.2 and 5.4 percent when estimated by two-stage least squares.