Wage differentials between mothers and childless women are estimated correcting for the selectivity bias resulting from two double selection processes: firstly, the motherhood decision and the employment decision, and secondly the motherhood decision and the decision to be employed in a less demanding job. We use Dutch data on women’s wages and construct an indicator for less demanding jobs. Our estimations indicate that the motherhood decision is strongly correlated with both employment and having a less demanding job. This suggests that ignoring these correlations will lead to inconsistent parameter estimations of wage equations. The selectivity corrected estimation of women’s wage differentials indicate that a large part of the wage differential is composed by discrimination compared to estimations without correction for selectivity.
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Paper provided by Núcleo de Investigação em Microeconomia Aplicada (NIMA), Universidade do Minho in its series Working Papers with number
22.
Length: 24 pages Date of creation: Jun 2003 Date of revision: Handle: RePEc:nim:nimawp:22
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Find related papers by JEL classification: J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
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