Using Occupational Preference in Estimating Market Wage Discrimination: the Case of the Gender Pay Gap |
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| Authors: | Eric J Solberg |
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| Institution: | [Eric Solberg, Ph.D., is a professor of economics at California State University, Fuller-ton, Fullerton, CA 92834.] His research interests include labor market discrimination, women in the labor force, and the effects of minimum wage rates. |
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| Abstract: | ABSTRACT Past occupational preference is used to estimate the gender pay gap. The use of predetermined variables in a reduced-form wage equation avoids the bias caused by using variables that are correlated with the random error. Using a gender coefficient, the potential discriminatory gap is about 11.5 percent when past occupational preference is included. Decomposition yields an estimate of 10.5 percent when past occupational preference is included. In both cases, the discriminatory gap is close to that obtained when actual occupation is included. This suggests public policy directed toward reducing hiring discrimination by gender might be misdirected. |
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