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Poverty and Women’s Labor Market Activity: the Role of Gender Wage Discrimination in the EU

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Author Info
Carlos Gradín (Universidade de Vigo (Spain))
Olga Cantó () (Universidade de Vigo (Spain))
Coral del Río () (Universidade de Vigo (Spain))

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Abstract

The functioning of the labor market often has been stressed as a clear determinant in explaining poverty trends in developed countries. In this paper, we analyze the role of gender wage discrimination on household poverty rates in several EU countries, linking two related phenomena that rarely are analyzed together. In order to quantify the impact of discrimination on poverty, we propose the construction of a counterfactual distribution of wages where discrimination against women has been removed. Using this new wage distribution, we compute total household income and compare poverty rates in the absence of discrimination to those actually observed. Our results show that, in general, it is true that discrimination against women plays a determinant role in the current levels of poverty, even if we discover that results for each country present a different pattern and intensity. Further, we find that the effect of discrimination on poverty risk dramatically increases for individuals in households who largely depend on working female earnings, especially in the case of single mothers.

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Publisher Info
Paper provided by ECINEQ, Society for the Study of Economic Inequality in its series Working Papers with number 40.

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Length: 45 pages
Date of creation: 2006
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Handle: RePEc:inq:inqwps:ecineq2006-40

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Related research
Keywords: poverty; inequality; income distribution; gender; wage discrimination; labor participation.;

Find related papers by 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
J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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  1. Jenkins, Stephen P., 1994. "Earnings discrimination measurement : A distributional approach," Journal of Econometrics, Elsevier, vol. 61(1), pages 81-102, March. [Downloadable!] (restricted)
  2. Barbara Petrongolo, 2004. "Gender Segregation in Employment Contracts," Journal of the European Economic Association, MIT Press, vol. 2(2-3), pages 331-345, 04/05. [Downloadable!] (restricted)
  3. Antecol, Heather, 2000. "An examination of cross-country differences in the gender gap in labor force participation rates," Labour Economics, Elsevier, vol. 7(4), pages 409-426, July. [Downloadable!] (restricted)
  4. Hilary W. Hoynes & Marianne E. Page & Ann Huff Stevens, 2006. "Poverty in America: Trends and Explanations," Journal of Economic Perspectives, American Economic Association, vol. 20(1), pages 47-68, Winter. [Downloadable!] (restricted)
    Other versions:
  5. Francine D. Blau & Lawrence M. Kahn, 2003. "Understanding International Differences in the Gender Pay Gap," Journal of Labor Economics, University of Chicago Press, vol. 21(1), pages 106-144, January. [Downloadable!]
    Other versions:
  6. Reed, Deborah & Cancian, Maria, 2001. "Sources of Inequality: Measuring the Contributions of Income Sources to Rising Family Income Inequality," Review of Income and Wealth, Blackwell Publishing, vol. 47(3), pages 321-33, September. [Downloadable!] (restricted)
  7. Wiji Arulampalam & Alison Booth & Mark L. Bryan, 2006. "Is There a Glass Ceiling over Europe? Exploring the Gender Pay Gap across the Wages Distribution," CEPR Discussion Papers 510, Centre for Economic Policy Research, Research School of Social Sciences, Australian National University. [Downloadable!]
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  8. Albelda, Randy, 1999. "Women and poverty: Beyond earnings and welfare," The Quarterly Review of Economics and Finance, Elsevier, vol. 39(5), pages 723-742. [Downloadable!] (restricted)
  9. Petrongolo, Barbara, 2004. "Gender Segregation in Employment Contracts," CEPR Discussion Papers 4303, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  10. Ghazala Azmat & Maia Güell & Alan Manning, 2006. "Gender Gaps in Unemployment Rates in OECD Countries," Journal of Labor Economics, University of Chicago Press, vol. 24(1), pages 1-38, January. [Downloadable!]
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  11. Mercedes Sastre & Alain Trannoy, 2002. "Shapley inequality decomposition by factor components: Some methodological issues," Journal of Economics, Springer, vol. 9(1), pages 51-89, December. [Downloadable!] (restricted)
  12. Barbara Petrongolo, 2004. "Gender Segregation in Employment Contracts," CEP Discussion Papers dp0637, Centre for Economic Performance, LSE. [Downloadable!]
  13. Olga Cantó, 2003. "Finding out the Routes to Escape Poverty: The Relevance of Demographic vs. Labor Market Events in Spain," Review of Income and Wealth, Blackwell Publishing, vol. 49(4), pages 569-588, December. [Downloadable!] (restricted)
  14. 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)
    Other versions:
  15. Juhn, Chinhui & Murphy, Kevin M, 1997. "Wage Inequality and Family Labor Supply," Journal of Labor Economics, University of Chicago Press, vol. 15(1), pages 72-97, January. [Downloadable!] (restricted)
    Other versions:
  16. Shorrocks, A F, 1982. "Inequality Decomposition by Factor Components," Econometrica, Econometric Society, vol. 50(1), pages 193-211, January. [Downloadable!] (restricted)
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