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Gender and potential wage in Europe: a stochastic frontier approach

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Author Info

  • Ma Ángeles Díaz
  • Rosario Sánchez

Abstract

Purpose – The purpose of this paper is to provide evidence concerning wage differentials and the existence of gender pay discrimination in France, Germany, Italy, Spain and the United Kingdom. Design/methodology/approach – The authors used the stochastic frontier approach as an alternative method to measure the relevance of gender discrimination. This methodology allows them to explain the differences between the potential and the observed wage that an individual could obtain, given his or her human capital endowment. Findings – The authors found support for wage discrimination against women. The results show that a significant part of the gender wage gap in all the countries analysed is not attributable to differences in human capital endowment or personal and job-related characteristics. Research limitations/implications – The definition of education in the data set is modest and broadly defined. Originality/value – This paper contributes to the debate on gender discrimination by analysing the determinants of the gender gap using an innovative methodology in the gender gap literature: the stochastic frontier approach.

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Bibliographic Info

Article provided by Emerald Group Publishing in its journal International Journal of Manpower.

Volume (Year): 32 (2011)
Issue (Month): 4 (July)
Pages: 410-425

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Handle: RePEc:eme:ijmpps:v:32:y:2011:i:4:p:410-425

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Related research

Keywords: Europe; Gender; Inefficiency; Stochastic frontier; Wage differentials;

References

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  1. Joseph G. Altonji & Rebecca M. Blank, . "Race and Gender in the Labor Market," IPR working papers 98-18, Institute for Policy Resarch at Northwestern University.
  2. Francine D. Blau & Lawrence M. Kahn, 2001. "Understanding International Differences in the Gender Pay Gap," NBER Working Papers 8200, National Bureau of Economic Research, Inc.
  3. Alan Manning & Joanna Swaffield, 2008. "The gender gap in early-career wage growth," Economic Journal, Royal Economic Society, vol. 118(530), pages 983-1024, 07.
  4. Groot, Wim & Oosterbeek, Hessel, 1994. "Stochastic reservation and offer wages," Labour Economics, Elsevier, vol. 1(3-4), pages 383-390, September.
  5. Polachek, Solomon W & Yoon, Bong Joon, 1996. "Panel Estimates of a Two-Tiered Earnings Frontier," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 11(2), pages 169-78, March-Apr.
  6. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
  7. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, July.
  8. Becker, Gary S, 1985. "Human Capital, Effort, and the Sexual Division of Labor," Journal of Labor Economics, University of Chicago Press, vol. 3(1), pages S33-58, January.
  9. Peter Dawson & Timothy Hinks & Duncan Watson, 2001. "German Wage Underpayment: An Investigation into Labor Market Inefficiency and Discrimination," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 70(1), pages 107-114.
  10. Herzog, Henry W, Jr & Hofler, Richard A & Schlottmann, Alan M, 1985. "Life on the Frontier: Migrant Information, Earnings and Past Mobility," The Review of Economics and Statistics, MIT Press, vol. 67(3), pages 373-82, August.
  11. Bishop, John A. & Grodner, Andrew & Liu, Haiyong & Chiou, Jong-Rong, 2007. "Gender earnings differentials in Taiwan: A stochastic frontier approach," Journal of Asian Economics, Elsevier, vol. 18(6), pages 934-945, December.
  12. Wang, Hung-Jen, 2006. "Stochastic frontier models," MPRA Paper 31079, University Library of Munich, Germany.
  13. Slottje, Daniel J. & Hirschberg, Joseph G. & Hayes, Kathy J. & Scully, Gerald W., 1994. "A new method for detecting individual and group labor market discrimination," Journal of Econometrics, Elsevier, vol. 61(1), pages 43-64, March.
  14. Luisa Escriche & Gonzalo Olcina & Rosario Sánchez, 2004. "Gender discrimination and intergenerational transmission of preferences," Oxford Economic Papers, Oxford University Press, vol. 56(3), pages 485-511, July.
  15. Kunze, Astrid, 2005. "The evolution of the gender wage gap," Labour Economics, Elsevier, vol. 12(1), pages 73-97, February.
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Cited by:
  1. Contreras, Dulce/D & Sánchez, Rosario/R & Soria, Delfina/D, 2012. "Mobility, wages and gender across Europe," MPRA Paper 42589, University Library of Munich, Germany, revised Nov 2012.

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