Advanced Search
MyIDEAS: Login to save this paper or follow this series

Beyond the mean gender wage gap: Decomposition of differences in wage distributions using quantile regression

Contents:

Author Info

  • Heinze, Anja
Registered author(s):

    Abstract

    Using linked employer-employee data, this study measures and decomposes the differences in the earnings distribution between male and female employees in Germany. I extend the traditional decomposition to disentangle the effect of human capital characteristics and the effect of firm characteristics in explaining the gender wage gap. Furthermore, I implement the decomposition across the whole wage distribution with the method proposed by Machado and Mata (2005). Thereby, I take into account the dependence between the human capital endowment of individuals and workplace characteristics. The selection of women into less successful and productive firms explains a sizeable part of the gap. This selection is more pronounced in the lower part of the wage distribution than in the upper tail. In addition, women also benefit from the success of firms by rent-sharing to a lesser extent than their male colleagues. This is the source of the largest part of the pay gap. Gender differences in human capital endowment as well as differences in returns to human capital are less responsible for the wage differential. --

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://econstor.eu/bitstream/10419/36385/1/63043901X.pdf
    Download Restriction: no

    Bibliographic Info

    Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 10-043.

    as in new window
    Length:
    Date of creation: 2010
    Date of revision:
    Handle: RePEc:zbw:zewdip:10043

    Contact details of provider:
    Postal: L 7,1; D - 68161 Mannheim
    Phone: +49/621/1235-01
    Fax: +49/621/1235-224
    Email:
    Web page: http://www.zew.de/
    More information through EDIRC

    Related research

    Keywords: gender wage gap; decomposition; quantile regression;

    Find related papers by JEL classification:

    This paper has been announced in the following NEP Reports:

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Hübler, Olaf & Jirjahn, Uwe, 2001. "Works Councils and Collective Bargaining in Germany: The Impact on Productivity and Wages," IZA Discussion Papers 322, Institute for the Study of Labor (IZA).
    2. Jacques Silber & Michal Weber, 1999. "Labour market discrimination: are there significant differences between the various decomposition procedures?," Applied Economics, Taylor & Francis Journals, vol. 31(3), pages 359-365.
    3. Lembcke, Alexander C. & Kohn, Karsten & Fitzenberger, Bernd, 2008. "Union Density and Varieties of Coverage: The Anatomy of Union Wage Effects in Germany," ZEW Discussion Papers 08-012, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    4. Kimberly Bayard & Judith Hellerstein & David Neumark & Kenneth Troske, 2003. "New Evidence on Sex Segregation and Sex Differences in Wages from Matched Employee-Employer Data," Journal of Labor Economics, University of Chicago Press, vol. 21(4), pages 887-922, October.
    5. Javier Gardeazabal & Arantza Ugidos, 2005. "Gender wage discrimination at quantiles," Journal of Population Economics, Springer, vol. 18(1), pages 165-179, 07.
    6. Christoph Schmidt & Klaus Zimmerman, 1990. "Work Characteristics, Firm Size and Wages," Working Papers 644, Princeton University, Department of Economics, Industrial Relations Section..
    7. Bernard, A. & Wagner, J., 1996. "Exports and Success in German Manufacturing," Working papers 96-10, Massachusetts Institute of Technology (MIT), Department of Economics.
    8. James Albrecht & Anders Bjorklund & Susan Vroman, 2003. "Is There a Glass Ceiling in Sweden?," Journal of Labor Economics, University of Chicago Press, vol. 21(1), pages 145-177, January.
    9. Blaise Melly, 2005. "Public-private sector wage differentials in Germany: Evidence from quantile regression," Empirical Economics, Springer, vol. 30(2), pages 505-520, 09.
    10. Fitzenberger, Bernd & Kunze, Astrid, 2005. "Vocational Training and Gender: Wages and Occupational Mobility among Young Workers," IZA Discussion Papers 1766, Institute for the Study of Labor (IZA).
    11. Gubta, Nabanita Datta & Rothstein, Donna S., 2001. "The Impact of Worker and Establishment-level Characteristics on Male-Female Wage Differentials: Evidence from Danish Matched Employee-Employer Data," CLS Working Papers 01-9, University of Aarhus, Aarhus School of Business, Centre for Labour Market and Social Research.
    12. Erica L. Groshen, 1987. "The structure of the female/male wage differential: is it who you are, what you do, or where you work?," Working Paper 8708, Federal Reserve Bank of Cleveland.
    13. Nicole M. Fortin & Thomas Lemieux, 1998. "Rank Regressions, Wage Distributions, and the Gender Gap," Journal of Human Resources, University of Wisconsin Press, vol. 33(3), pages 610-643.
    14. Michael C. Burda & Bernd Fitzenberger & Alexander Lembcke & Thorsten Vogel, 2008. "Unionization, Stochastic Dominance, and Compression of the Wage Distribution: Evidence from Germany," SFB 649 Discussion Papers SFB649DP2008-041, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
    15. Addison, John T. & Teixeira, Paulino & Zwick, Thomas, 2006. "Works councils and the anatomy of wages," ZEW Discussion Papers 06-86, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    16. Heinze, Anja & Beninger, Denis & Beblo, Miriam & Laisney, François, 2003. "Measuring Selectivity-Corrected Gender Wage Gaps in the EU," ZEW Discussion Papers 03-74, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    17. Thorsten Schank & Claus Schnabel & Joachim Wagner, 2010. "Higher wages in exporting firms: self-selection, export effect, or both? First evidence from linked employer-employee data," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 146(2), pages 303-322, June.
    18. Dorothe Bonjour & Michael Gerfin, 1997. "The Unequal Distribution of Unequal Pay - An Empirical Analysis of the Gender Wage Gap in Switzerland," Diskussionsschriften dp9702, Universitaet Bern, Departement Volkswirtschaft.
    19. Kohn, Karsten, 2006. "Rising Wage Dispersion, After All! The German Wage Structure at the Turn of the Century," IZA Discussion Papers 2098, Institute for the Study of Labor (IZA).
    20. José Mata & José A. F. Machado, 2005. "Counterfactual decomposition of changes in wage distributions using quantile regression," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(4), pages 445-465.
    21. 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.
    22. John T. Addison & Paulino Teixeira & Thomas Zwick, 2007. "German Works Councils and The Anatomy of Wages," Working Paper Series 13-07, The Rimini Centre for Economic Analysis, revised Jul 2007.
    23. Donald, Stephen G & Green, David A & Paarsch, Harry J, 2000. "Differences in Wage Distributions between Canada and the United States: An Application of a Flexible Estimator of Distribution Functions in the Presence of Covariates," Review of Economic Studies, Wiley Blackwell, vol. 67(4), pages 609-33, October.
    24. Alan S. Blinder, 1973. "Wage Discrimination: Reduced Form and Structural Estimates," Journal of Human Resources, University of Wisconsin Press, vol. 8(4), pages 436-455.
    25. Koenker, Roger & Park, Beum J., 1996. "An interior point algorithm for nonlinear quantile regression," Journal of Econometrics, Elsevier, vol. 71(1-2), pages 265-283.
    26. Powell, James L., 1984. "Least absolute deviations estimation for the censored regression model," Journal of Econometrics, Elsevier, vol. 25(3), pages 303-325, July.
    27. Blanchflower, David G & Oswald, Andrew J & Sanfey, Peter, 1996. "Wages, Profits, and Rent-Sharing," The Quarterly Journal of Economics, MIT Press, vol. 111(1), pages 227-51, February.
    28. Kevin Reilly & Tony Wirjanto, 1999. "Does More Mean Less? The Male/Female Wage Gap and the Proportion of Females at the Establishment Level," Canadian Journal of Economics, Canadian Economics Association, vol. 32(4), pages 906-929, August.
    29. Fitzenberger, Bernd & Kohn, Karsten, 2006. "Gleicher Lohn für gleiche Arbeit? Zum Zusammenhang zwischen Gewerkschaftsmitgliedschaft und Lohnstruktur in Westdeutschland 1985?1997," ZEW Discussion Papers 06-06, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    30. Gesine Stephan & Knut Gerlach, 2005. "Wage settlements and wage setting: results from a multi-level model," Applied Economics, Taylor & Francis Journals, vol. 37(20), pages 2297-2306.
    31. Albrecht, James & van Vuuren, Aico & Vroman, Susan, 2004. "Decomposing the Gender Wage Gap in the Netherlands with Sample Selection Adjustments," IZA Discussion Papers 1400, Institute for the Study of Labor (IZA).
    32. John M. Abowd & Thomas Lemieux, 1991. "The Effects of Product Market Competition on Collective Bargaining Agreements: The Case of Foreign Competition in Canada," NBER Working Papers 3808, National Bureau of Economic Research, Inc.
    33. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, octubre-d.
    34. Groshen, Erica L, 1991. "Sources of Intra-industry Wage Dispersion: How Much Do Employers Matter?," The Quarterly Journal of Economics, MIT Press, vol. 106(3), pages 869-84, August.
    35. 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.
    36. Marie Drolet, 2002. "Can the workplace explain Canadian gender pay differentials?," New Zealand Economic Papers, Taylor & Francis Journals, vol. 36(1), pages 75-77.
    37. Moshe Buchinsky, 1998. "Recent Advances in Quantile Regression Models: A Practical Guideline for Empirical Research," Journal of Human Resources, University of Wisconsin Press, vol. 33(1), pages 88-126.
    38. Bender, Stefan & Haas, Anette & Klose, Christoph, 2000. "IAB Employment Subsample 1975-1995 Opportunities for Analysis Provided by the Anonymised Subsample," IZA Discussion Papers 117, Institute for the Study of Labor (IZA).
    39. Bernard, A., 1997. "Exceptional Exporter Performance: Cause, Effect, or Both?," Working papers 97-21, Massachusetts Institute of Technology (MIT), Department of Economics.
    40. Oaxaca, Ronald L. & Ransom, Michael R., 1994. "On discrimination and the decomposition of wage differentials," Journal of Econometrics, Elsevier, vol. 61(1), pages 5-21, March.
    41. Sara Rica & Juan Dolado & Vanesa Llorens, 2008. "Ceilings or floors? Gender wage gaps by education in Spain," Journal of Population Economics, Springer, vol. 21(3), pages 751-776, July.
    42. Gartner, Hermann, 2005. "The imputation of wages above the contribution limit with the German IAB employment sample," FDZ Methodenreport 200502_en, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    43. Powell, James L., 1986. "Censored regression quantiles," Journal of Econometrics, Elsevier, vol. 32(1), pages 143-155, June.
    44. Marie Drolet, 2002. "Can the Workplace Explain Canadian Gender Pay Differentials?," Canadian Public Policy, University of Toronto Press, vol. 28(s1), pages 41-63, May.
    45. Francine D. Blau & Lawrence M. Kahn, 2001. "Understanding International Differences in the Gender Pay Gap," NBER Working Papers 8200, National Bureau of Economic Research, Inc.
    46. Kremer, Michael, 1993. "The O-Ring Theory of Economic Development," The Quarterly Journal of Economics, MIT Press, vol. 108(3), pages 551-75, August.
    47. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters, in: Schooling, Experience, and Earnings, pages 1-4 National Bureau of Economic Research, Inc.
    48. A. R. Cardoso, 2000. "Wage differentials across firms: an application of multilevel modelling," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 15(4), pages 343-354.
    49. Buchinsky, Moshe, 1994. "Changes in the U.S. Wage Structure 1963-1987: Application of Quantile Regression," Econometrica, Econometric Society, vol. 62(2), pages 405-58, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. SELEZNEVA Ekaterina & VAN KERM Philippe, 2013. "Inequality-adjusted gender wage differentials in Germany," CEPS/INSTEAD Working Paper Series 2013-18, CEPS/INSTEAD.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:zbw:zewdip:10043. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.