Slicing and dicing the gender/racial earnings differentials
Purpose – This paper aims to explore an extensive set of determinants of earnings and to offer recent empirical evidence of their effects on gender and racial earnings gaps. Design/methodology/approach – Most previous studies looked at gender and racial comparisons independently of each other. This study extends previous studies by considering the interaction between gender and race. Using administrative data from a large Canadian firm, this paper explores the determinants of earnings based on a standard human capital model, comparing the earnings of white females, minority males and minority females with their white male counterparts. Both the dummy variable approach and a decomposition analysis are employed. Findings – The results show that ranking in the organizational hierarchy accounts for most of the differences in gender and racial earnings, and ranking, together with human capital and job characteristics variables, explains over 90 percent of the earnings gap. Research limitations/implications – The analyses in the paper are based on data from a Canadian organization with nation-wide operations. The findings may not apply to small or medium sized enterprises in Canada and in other non-Western economies. Practical implications – To eliminate the earnings gap, equal pay programs need to be supplemented by effective employers' programs and policies targeted at equal advancement opportunity. Originality/value – The paper uses firm-level data, which provides natural controls for variations across firms and allows for more in-depth analysis of the impact of various factors on earnings differentials.
Volume (Year): 31 (2010)
Issue (Month): 4 ( July)
|Contact details of provider:|| Web page: http://www.emeraldinsight.com|
|Order Information:|| Postal: Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK|
Web: http://www.emeraldinsight.com/ijm.htm Email:
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.:
- Lazear, Edward P & Rosen, Sherwin, 1990. "Male-Female Wage Differentials in Job Ladders," Journal of Labor Economics, University of Chicago Press, vol. 8(1), pages S106-23, January.
- 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.
- Halvorsen, Robert & Palmquist, Raymond, 1980. "The Interpretation of Dummy Variables in Semilogarithmic Equations," American Economic Review, American Economic Association, vol. 70(3), pages 474-75, June.
- Cotton, Jeremiah, 1988. "On the Decomposition of Wage Differentials," The Review of Economics and Statistics, MIT Press, vol. 70(2), pages 236-43, May.
- Drolet, Marie, 2001. "The Persistent Gap: New Evidence on the Canadian Gender Wage Gap," Analytical Studies Branch Research Paper Series 2001157e, Statistics Canada, Analytical Studies Branch.
- R. A. Holmes, 1976. "Male-Female Earnings Differentials in Canada," Journal of Human Resources, University of Wisconsin Press, vol. 11(1), pages 109-117.
- 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.
- David Neumark, 1988.
"Employers' Discriminatory Behavior and the Estimation of Wage Discrimination,"
Journal of Human Resources,
University of Wisconsin Press, vol. 23(3), pages 279-295.
- David Neumark, 1987. "Employers' discriminatory behavior and the estimation of wage discrimination," Special Studies Papers 227, Board of Governors of the Federal Reserve System (U.S.).
- William E. Schrank, 1977. "Sex Discrimination in Faculty Salaries: A Case Study," Canadian Journal of Economics, Canadian Economics Association, vol. 10(3), pages 411-33, August.
- Derek Hum & Wayne Simpson, 1999. "Wage Opportunities for Visible Minorities in Canada," Canadian Public Policy, University of Toronto Press, vol. 25(3), pages 379-394, September.
- McCue, Kristin, 1996. "Promotions and Wage Growth," Journal of Labor Economics, University of Chicago Press, vol. 14(2), pages 175-209, April.
- 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.
- Cobb-Clark, Deborah A., 2001. "Getting Ahead: The Determinants of and Payoffs to Internal Promotion for Young U.S. Men and Women," IZA Discussion Papers 288, Institute for the Study of Labor (IZA).
- Reimers, Cordelia W, 1983. "Labor Market Discrimination against Hispanic and Black Men," The Review of Economics and Statistics, MIT Press, vol. 65(4), pages 570-79, November.
- Michael P. Kidd & Michael Shannon, 1994. "An Update and Extension of the Canadian Evidence on Gender Wage Differentials," Canadian Journal of Economics, Canadian Economics Association, vol. 27(4), pages 918-38, November.
- Marie Drolet, 2002. "Can the workplace explain Canadian gender pay differentials?," New Zealand Economic Papers, Taylor & Francis Journals, vol. 36(1), pages 75-77.
- 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.
- Booth, Alison L. & Francesconi, Marco & Frank, Jeff, 2003. "A sticky floors model of promotion, pay, and gender," European Economic Review, Elsevier, vol. 47(2), pages 295-322, April.
When requesting a correction, please mention this item's handle: RePEc:eme:ijmpps:v:31:y:2010:i:4:p:466-488. 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: (Virginia Chapman)
If references are entirely missing, you can add them using this form.