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The Impact of Selection into the Labor Force on the Gender Wage Gap

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Listed:
  • Blau, Francine D.

    (Cornell University)

  • Kahn, Lawrence M.

    (Cornell University)

  • Boboshko, Nikolai

    (Cornell University)

  • Comey, Matthew

    (Cornell University)

Abstract

We study the impact of selection bias on the gender pay gap, focusing on post 1981 period. Previous work on this question has found divergent results. Using Michigan Panel Study of Income Dynamics data and several identification strategies, we find that, after adjusting for selection, there were large declines in the raw and the unexplained gender wage gaps over the 1981-2015 period. Under our preferred method of accounting for selection, the raw median wage gap fell by 0.378 log points, and the median unexplained gap fell by 0.204 log points. These declines are larger than estimates that do not account for selection. Our results suggest that women's relative wage offers have increased over this period. However, substantial gender wage gaps remain. In 2015, at the median, the selectivity-corrected gaps were 0.242 log points (raw gap) and 0.206 log points (unexplained gap).

Suggested Citation

  • Blau, Francine D. & Kahn, Lawrence M. & Boboshko, Nikolai & Comey, Matthew, 2021. "The Impact of Selection into the Labor Force on the Gender Wage Gap," IZA Discussion Papers 14335, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp14335
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    Cited by:

    1. Richard Blundell & James P. Ziliak & Hugo Lopez, 2023. "Labour market inequality and the changing life cycle profile of male and female wages," IFS Working Papers W23/16, Institute for Fiscal Studies.
    2. Fernández-Val, Iván & van Vuuren, Aico & Vella, Francis, 2023. "Marital Sorting, Household Inequality and Selection," IZA Discussion Papers 16513, Institute of Labor Economics (IZA).
    3. Ahrsjö, Ulrika & Niknami, Susan & Palme, Mårten, 2021. "Wage Inequality, Selection and the Evolution of the Gender Earnings Gap in Sweden," Research Papers in Economics 2021:3, Stockholm University, Department of Economics.
    4. Iv'an Fern'andez-Val & Franco Peracchi & Aico van Vuuren & Francis Vella, 2018. "Selection and the Distribution of Female Hourly Wages in the U.S," Papers 1901.00419, arXiv.org, revised Jan 2022.
    5. Iván Fernández‐Val & Aico van Vuuren & Francis Vella & Franco Peracchi, 2023. "Selection and the distribution of female real hourly wages in the United States," Quantitative Economics, Econometric Society, vol. 14(2), pages 571-607, May.
    6. Borjas, George J. & Edo, Anthony, 2023. "Monopsony, Efficiency, and the Regularization of Undocumented Immigrants," IZA Discussion Papers 16297, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    selection bias; gender wage gap;

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models; Threshold Regression Models
    • 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

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