Explaining Gender Wage Differentials: Findings from a Random Effects Model
AbstractIn this paper we evaluate the extent to which the gender wage gap in the Finnish manufacturing sector is attributable to within-job wage differentials, sex differences in individual qualifications, and disproportionate concentration of women in lower-paying firms and lower-paying jobs within firms. We use matched employer-employee data to compare wage differentials between similarly qualified female and male workers who are doing the same job for the same employer. Our modelling approach employs a nested random effects specification to account for the hierarchical grouped structure of the underlying data. White-collar women are found to earn 22% less on average than their male counterparts do. Among blue-collar workers, women?s mean wage is 16% lower than men?s mean wage. The major part of the gender wage gap of white-collar workers results from sex segregation among jobs within firms. By contrast, most of the gap of blue-collar workers is attributable to sex segregation among firms. Unexplained within-job wage differentials account for a quarter of the overall gap of white-collar workers and one-fifth of the overall gap of blue-collar workers.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Government Institute for Economic Research Finland (VATT) in its series Discussion Papers with number 320.
Date of creation: 18 Dec 2003
Date of revision:
Find related papers by JEL classification:
- C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
- L00 - Industrial Organization - - General - - - General
- J70 - Labor and Demographic Economics - - Labor Discrimination - - - General
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Davis, Peter, 2002. "Estimating multi-way error components models with unbalanced data structures," Journal of Econometrics, Elsevier, vol. 106(1), pages 67-95, January.
- 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
- Erica L. Groshen, 1987.
"The structure of the female/male wage differential: is it who you are, what you do, or where you work?,"
8708, Federal Reserve Bank of Cleveland.
- Erica L. Groshen, 1991. "The Structure of the Female/Male Wage Differential: Is It Who You Are, What You Do, or Where You Work?," Journal of Human Resources, University of Wisconsin Press, vol. 26(3), pages 457-472.
- Francine D. Blau & Lawrence M. Kahn, 2000.
"Gender Differences in Pay,"
Journal of Economic Perspectives,
American Economic Association, vol. 14(4), pages 75-99, Fall.
- H. Baltagi, Badi & Heun Song, Seuck & Cheol Jung, Byoung, 2001. "The unbalanced nested error component regression model," Journal of Econometrics, Elsevier, vol. 101(2), pages 357-381, April.
- Kimberly Bayard & Judith Hellerstein & David Neumark & Kenneth Troske, 1999.
"New Evidence on Sex Segregation and Sex Differences in Wages from Matched Employee-Employer Data,"
NBER Working Papers
7003, National Bureau of Economic Research, Inc.
- Kimberly Bayard & Judith Hellerstein & David Neumark & Kenneth Troske, 2003. "New Evidence on Sex Segregation and Sex Differences in Wages from Matched Employee-Employer Data," Journal of Labor Economics, University of Chicago Press, vol. 21(4), pages 887-922, October.
- Kenneth R Troske & Kimberly N Bayard & Judith Hellerstein & David Neumark, 1998. "New Evidence On Sex Segregation And Sex Differences In Wages From Matched Employee-Employer Data," Working Papers 98-18, Center for Economic Studies, U.S. Census Bureau.
- Nabanita Datta Gupta & Donna S. Rothstein, 2005.
"The Impact of Worker and Establishment-level Characteristics on Male-Female Wage Differentials: Evidence from Danish Matched Employee-Employer Data,"
CEIS, vol. 19(1), pages 1-34, 03.
- Gubta, Nabanita Datta & Rothstein, Donna S., 2001. "The Impact of Worker and Establishment-level Characteristics on Male-Female Wage Differentials: Evidence from Danish Matched Employee-Employer Data," CLS Working Papers 01-9, University of Aarhus, Aarhus School of Business, Centre for Labour Market and Social Research.
- Korkeamaki, Ossi & Kyyra, Tomi, 2006. "A gender wage gap decomposition for matched employer-employee data," Labour Economics, Elsevier, vol. 13(5), pages 611-638, October.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Anita Niskanen).
If references are entirely missing, you can add them using this form.