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Selection, Heterogeneity and the Gender Wage Gap

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  • Machado, Cecilia

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    (Fundação Getúlio Vargas)

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    Abstract

    Selection correction methods usually make assumptions about selection itself. In the case of gender wage gap estimation, those assumptions are specially tenuous because of high female non-participation and because selection could be different in different parts of the labor market. This paper proposes an estimator for the wage gap that allows for arbitrary heterogeneity in selection. It applies to the subpopulation of "always employed" women, which is similar to men in labor force attachment. Using CPS data from 1976 to 2005, I show that the gap has narrowed substantially from a -.521 to a -.263 log wage points differential for this population.

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    Bibliographic Info

    Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7005.

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    Length: 64 pages
    Date of creation: Nov 2012
    Date of revision:
    Handle: RePEc:iza:izadps:dp7005

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    Keywords: selection; gender wage gap;

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    1. Claudia Olivetti & Barbara Petrongolo, 2008. "Unequal Pay or Unequal Employment? A Cross-Country Analysis of Gender Gaps," Journal of Labor Economics, University of Chicago Press, vol. 26(4), pages 621-654, October.
    2. Casey B. Mulligan & Yona Rubinstein, 2008. "Selection, Investment, and Women's Relative Wages Over Time," The Quarterly Journal of Economics, MIT Press, vol. 123(3), pages 1061-1110, August.
    3. Heckman, James J, 1974. "Shadow Prices, Market Wages, and Labor Supply," Econometrica, Econometric Society, vol. 42(4), pages 679-94, July.
    4. Francis Vella, 1998. "Estimating Models with Sample Selection Bias: A Survey," Journal of Human Resources, University of Wisconsin Press, vol. 33(1), pages 127-169.
    5. Angrist, Joshua D & Evans, William N, 1998. "Children and Their Parents' Labor Supply: Evidence from Exogenous Variation in Family Size," American Economic Review, American Economic Association, vol. 88(3), pages 450-77, June.
    6. Pierre Chiapore & Climent Quintana Domeque & Sonia Oreffice, 2010. "Fatter attraction: anthropometric and socieconomic matching on the marriage market," Working Papers. Serie AD 2010-23, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    7. Heckman, James J, 1990. "Varieties of Selection Bias," American Economic Review, American Economic Association, vol. 80(2), pages 313-18, May.
    8. Jane Waldfogel, 1998. "Understanding the "Family Gap" in Pay for Women with Children," Journal of Economic Perspectives, American Economic Association, vol. 12(1), pages 137-156, Winter.
    9. Derek Neal, 2002. "The Measured Black-White Wage Gap Among Women is Too Small," NBER Working Papers 9133, National Bureau of Economic Research, Inc.
    10. Claudia Goldin & Lawrence F. Katz, 2000. "The Power of the Pill: Oral Contraceptives and Women's Career and Marriage Decisions," NBER Working Papers 7527, National Bureau of Economic Research, Inc.
    11. Chinhui Juhn & Kevin M. Murphy, 1996. "Wage Inequality and Family Labor Supply," NBER Working Papers 5459, National Bureau of Economic Research, Inc.
    12. Robert J. Willis, . "What Have We Learned from the Economics of the Family?," University of Chicago - Population Research Center 87-1, Chicago - Population Research Center.
    13. Edward Vytlacil, 2002. "Independence, Monotonicity, and Latent Index Models: An Equivalence Result," Econometrica, Econometric Society, vol. 70(1), pages 331-341, January.
    14. Martha J. Bailey & Brad Hershbein & Amalia R. Miller, 2012. "The Opt-In Revolution? Contraception and the Gender Gap in Wages," American Economic Journal: Applied Economics, American Economic Association, vol. 4(3), pages 225-54, July.
    15. Browning, Martin, 1992. "Children and Household Economic Behavior," Journal of Economic Literature, American Economic Association, vol. 30(3), pages 1434-75, September.
    16. Gronau, Reuben, 1974. "Wage Comparisons-A Selectivity Bias," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1119-43, Nov.-Dec..
    17. Martin Huber & Blaise Melly, 2012. "A test of the conditional independence assumption in sample selection models," Working Papers 2012-11, Brown University, Department of Economics.
    18. Katz, Lawrence & Goldin, Claudia, 2002. "The Power of the Pill: Oral Contraceptives and Women’s Career and Marriage Decisions," Scholarly Articles 2624453, Harvard University Department of Economics.
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