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Male-Female Wage and Productivity Differentials: A Structural Approach Using Japanese Firm-level Panel Data

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ASANO Hirokatsu
KAWAGUCHI Daiji

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Abstract

In an attempt to explain the male-female wage differential, we estimated the relative marginal productivity and relative wage of female workers compared to those of male workers, using panel data from Japanese firms. The estimation results indicate that firms hiring 10 percentage points more women produce 0.8 percent more given the total wage bill and other inputs. Crosssectional estimates that neglect firm fixed effects indicate that female workers' marginal productivity is 45 percent of male workers', while female wage is 30 percent of male wage. These estimates indicate that part of the wage differential cannot be explained by the productivity differential. The estimation that allows for the correlated productivity/demand shocks suggests the robustness of the results. The IV estimator that allows for firm-level fixed effects seems to suffer from the bias due to the positive correlation between productivity/demand shocks and female employee proportion. Evidence found in this study rejects the null hypothesis that the male-female wage differential reflects the male-female productivity differentials.

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Paper provided by Research Institute of Economy, Trade and Industry (RIETI) in its series Discussion papers with number 07020.

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Length: 30 pages
Date of creation: Mar 2007
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Handle: RePEc:eti:dpaper:07020

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  6. Judith K. Hellerstein & David Neumark & Kenneth R. Troske, 1997. "Market Forces and Sex Discrimination," NBER Working Papers 6321, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  7. Andrea Ichino & Enrico Moretti, 2006. "Biological Gender Differences, Absenteeism and the Earning Gap," IZA Discussion Papers 2207, Institute for the Study of Labor (IZA). [Downloadable!]
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  8. Altonji, Joseph G. & Blank, Rebecca M., 1999. "Race and gender in the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 48, pages 3143-3259 Elsevier. [Downloadable!] (restricted)
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  13. Kawaguchi, Daiji, 2007. "A market test for sex discrimination: Evidence from Japanese firm-level panel data," International Journal of Industrial Organization, Elsevier, vol. 25(3), pages 441-460, June. [Downloadable!] (restricted)
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  15. repec:rus:hseeco:9982 is not listed on IDEAS
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