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The Determination of Wages and the Gender Wage Gap: A Survey

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  • Kunze, Astrid

    ()
    (Norwegian School of Economics)

Abstract

In this paper the extensive empirical literature on the gender wage gap is reviewed with particular attention given to the identification of the key parameters in the specified human capital wage regression models. This aspect has been of great importance in the literature chiefly for two reasons. On the one hand, the main explanatory variables in the wage model, i.e. measures of work experience and time out of work, are endogenous and, hence, applying traditional estimators may lead to inconsistent parameter estimates. On the other hand, empirical evidence on the gender wage gap hinges on the estimates of the main parameters of interest and its economic meaningfulness may be limited by restrictive assumptions imputed on the wage model. The survey shows that econometric methods are still more advanced than their applications, and that in applications consistency often is only achieved at the expense of restrictive assumptions that are dubious from an economic perspective. In short, it seems that current measures of male-female wage differentials are likely to be biased because of the failure to appropriately account for endogeneity and selectivity in the wage regression models.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 193.

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Length: 76 pages
Date of creation: Aug 2000
Date of revision:
Handle: RePEc:iza:izadps:dp193

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Related research

Keywords: wage discrimination; human capital wage regression model; model construction and estimation; Male-female wage differentials;

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References

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  1. Greenhalgh, Christine A, 1980. "Male-Female Wage Differentials in Great Britain: Is Marriage an Equal Opportunity?," Economic Journal, Royal Economic Society, vol. 90(363), pages 751-75, December.
  2. Blau, Francine D & Kahn, Lawrence M, 1992. "The Gender Earnings Gap: Learning from International Comparisons," American Economic Review, American Economic Association, vol. 82(2), pages 533-38, May.
  3. Jacob Mincer & Haim Ofek, 1982. "Interrupted Work Careers: Depreciation and Restoration of Human Capital," Journal of Human Resources, University of Wisconsin Press, vol. 17(1), pages 3-24.
  4. Peter Dolton & Donal O'Neill & Olive Sweetman, 1996. "Gender Differences in the Changing Labor Market: The Role of Legislation and Inequality in Changing the Wage Gap for Qualified Workers in the United Kingdom," Journal of Human Resources, University of Wisconsin Press, vol. 31(3), pages 549-565.
  5. Francine D. Blau & Lawrence M. Kahn, 1992. "The Gender Earnings Gap: Some International Evidence," NBER Working Papers 4224, National Bureau of Economic Research, Inc.
  6. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-42, June.
  7. Susan Harkness, 1996. "The gender earnings gap: evidence from the UK," Fiscal Studies, Institute for Fiscal Studies, vol. 17(2), pages 1-36, May.
  8. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
  9. Gunderson, Morley, 1989. "Male-Female Wage Differentials and Policy Responses," Journal of Economic Literature, American Economic Association, vol. 27(1), pages 46-72, March.
  10. Suen, Wing, 1997. "Decomposing Wage Residuals: Unmeasured Skill or Statistical Artifact?," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages 555-66, July.
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Citations

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Cited by:
  1. Sami Napari, 2006. "The Early Career Gender Wage Gap," CEP Discussion Papers dp0738, Centre for Economic Performance, LSE.
  2. Raquel Vale Mendes, 2009. "Gender wage differentials and occupational distribution," Notas Económicas, Faculdade de Economia, Universidade de Coimbra, issue 29, pages 26-40, June.
  3. Günalp, Burak & Cilasun, Seyit Mümin & Acar, Elif Öznur, 2013. "Male-Female Labor Market Participation and the Extent of Gender-Based Wage Discrimination in Turkey," MPRA Paper 51503, University Library of Munich, Germany.
  4. Coral del Río Otero & Carlos Gradín Lago & Olga Cantó Sánchez, 2004. "El enfoque distributivo en el análisis de la discriminación salarial por razón de género," Working Papers 0405, Universidade de Vigo, Departamento de Economía Aplicada.
  5. Coral del Río Otero & Carlos Gradín Lago & Olga Cantó Sánchez, . "The measurement of gender wage discrimination: the distributional approach revisited," Studies on the Spanish Economy 192, FEDEA.
  6. Sami Napari, 2006. "The early career gender wage gap," LSE Research Online Documents on Economics 19844, London School of Economics and Political Science, LSE Library.
  7. Donata Favaro & Stefano Magrini, 2005. "Group versus individual discrimination among young workers: a distributional approach," Labor and Demography 0506003, EconWPA.
  8. Kapsos, Steven, 2008. "The gender wage gap in Bangladesh," ILO Working Papers 413417, International Labour Organization.
  9. Tindara ADDABBO & Donata Favaro, 2007. "Education and wage differentials by gender in Italy," CHILD Working Papers wp04_07, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
  10. Antonio Caparrós Ruiz & Lucía Navarro Gómez & Mario Rueda Narváez, 2010. "Endogenous wage determinants and returns to education in Spain," International Journal of Manpower, Emerald Group Publishing, vol. 31(4), pages 410-425, July.
  11. Arda Aktas & Gokce Uysal, 2011. "Explaining the Gender Wage Gap in Turkey Using the Wage Structure Survey," Working Papers 005, Bahcesehir University, Betam, revised Mar 2012.
  12. repec:iab:iabmit:v:36:i:4:p:539-559 is not listed on IDEAS
  13. Juan Ignacio Palacio & Hipólito J. Simón, . "Segregación laboral y diferencias salariales por sexo en España," Studies on the Spanish Economy 151, FEDEA.
  14. Yolanda Pena-Boquete, 2006. "A Comparative Analysis of the Evolution of Gender Wage Discrimination: Spain Versus Galicia," ERSA conference papers ersa06p340, European Regional Science Association.
  15. Arslan, Yavuz & Taskin, Temel, 2011. "Explaining the gender gaps in unemployment across OECD countries," MPRA Paper 34873, University Library of Munich, Germany.
  16. Giovanni Russo & Wolter Hassink, 2008. "The Part-Time Wage Gap: a Career Perspective," De Economist, Springer, vol. 156(2), pages 145-174, June.
  17. Baffoe-Bonnie, John & Ezeala-Harrison, Fidelis, 2005. "Incidence and duration of unemployment spells: Implications for the male-female wage differentials," The Quarterly Review of Economics and Finance, Elsevier, vol. 45(4-5), pages 824-847, September.
  18. Hübler, Olaf, 2003. "Geschlechtsspezifische Lohnunterschiede (Gender-specific wage differentials)," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 36(4), pages 539-559.
  19. Hazans, Mihails, 2005. "Unemployment and the earnings structure in Latvia," Policy Research Working Paper Series 3504, The World Bank.
  20. Raquel Vale Mendes, 2005. "Occupational segregation and the Portuguese gender wage gap," ERSA conference papers ersa05p130, European Regional Science Association.

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