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Gender disparities in wage returns to human capital components: how different are European labour markets?

Author

Listed:
  • Maryna Tverdostup

    (The Vienna Institute for International Economic Studies (wiiw), Vienna, Austria)

  • Tiiu Paas

    (School of Economics and Business Administration, University of Tartu, Tartu, Estonia)

Abstract

The paper investigates the gender wage gap in relation to the multi-dimensional human capital measure, asking which human capital components are most valued in the European labour markets. Relying on the Programme of International Assessment of Adult Competencies (PIAAC) data for seventeen European countries and applying Gelbach (Citation2016) decomposition, we document remarkable cross-country disparities in the returns to different human capital components. The only dimension that consistently and significantly decreases gender wage disparities in all countries is work experience related to a currently occupied position. Numeracy cognitive ability is another strong predictors of the gender wage disparity, while job-specific cognitive and non-cognitive skills reveal weaker than expected association with the gender wage gap. Unlike the studies stressing the decreasing importance of human capital in the gender wage gap assessment, we argue that a narrow definition of human capital may undermine the actual effect of the latter.

Suggested Citation

  • Maryna Tverdostup & Tiiu Paas, 2022. "Gender disparities in wage returns to human capital components: how different are European labour markets?," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 22(1), pages 28-48.
    • Handle: RePEc:bic:journl:v:22:y:2022:i:1:p:28-48
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    File URL: https://www.tandfonline.com/doi/epdf/10.1080/1406099X.2022.2033418
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    More about this item

    Keywords

    Decomposition; European labour markets; gender wage gap; human capital;
    All these keywords.

    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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