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Gender and potential wage in Europe: a stochastic frontier approach

Author

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  • Ma Ángeles Díaz
  • Rosario Sánchez

Abstract

Purpose - The purpose of this paper is to provide evidence concerning wage differentials and the existence of gender pay discrimination in France, Germany, Italy, Spain and the United Kingdom. Design/methodology/approach - The authors used the stochastic frontier approach as an alternative method to measure the relevance of gender discrimination. This methodology allows them to explain the differences between the potential and the observed wage that an individual could obtain, given his or her human capital endowment. Findings - The authors found support for wage discrimination against women. The results show that a significant part of the gender wage gap in all the countries analysed is not attributable to differences in human capital endowment or personal and job-related characteristics. Research limitations/implications - The definition of education in the data set is modest and broadly defined. Originality/value - This paper contributes to the debate on gender discrimination by analysing the determinants of the gender gap using an innovative methodology in the gender gap literature: the stochastic frontier approach.

Suggested Citation

  • Ma Ángeles Díaz & Rosario Sánchez, 2011. "Gender and potential wage in Europe: a stochastic frontier approach," International Journal of Manpower, Emerald Group Publishing, vol. 32(4), pages 410-425, July.
  • Handle: RePEc:eme:ijmpps:v:32:y:2011:i:4:p:410-425
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    References listed on IDEAS

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    1. Alan Manning & Joanna Swaffield, 2008. "The gender gap in early-career wage growth," Economic Journal, Royal Economic Society, vol. 118(530), pages 983-1024, July.
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    8. Altonji, Joseph G. & Blank, Rebecca M., 1999. "Race and gender in the labor market," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 48, pages 3143-3259 Elsevier.
    9. Herzog, Henry W, Jr & Hofler, Richard A & Schlottmann, Alan M, 1985. "Life on the Frontier: Migrant Information, Earnings and Past Mobility," The Review of Economics and Statistics, MIT Press, vol. 67(3), pages 373-382, August.
    10. Polachek, Solomon W & Yoon, Bong Joon, 1996. "Panel Estimates of a Two-Tiered Earnings Frontier," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 11(2), pages 169-178, March-Apr.
    11. Peter Dawson & Timothy Hinks & Duncan Watson, 2001. "German Wage Underpayment: An Investigation into Labor Market Inefficiency and Discrimination," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 70(1), pages 107-114.
    12. Slottje, Daniel J. & Hirschberg, Joseph G. & Hayes, Kathy J. & Scully, Gerald W., 1994. "A new method for detecting individual and group labor market discrimination," Journal of Econometrics, Elsevier, vol. 61(1), pages 43-64, March.
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    14. Bishop, John A. & Grodner, Andrew & Liu, Haiyong & Chiou, Jong-Rong, 2007. "Gender earnings differentials in Taiwan: A stochastic frontier approach," Journal of Asian Economics, Elsevier, vol. 18(6), pages 934-945, December.
    15. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
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    Citations

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    Cited by:

    1. Contreras, Dulce/D & Sánchez, Rosario/R & Soria, Delfina/D, 2012. "Mobility, wages and gender across Europe," MPRA Paper 42589, University Library of Munich, Germany, revised Nov 2012.
    2. Bazen, Stephen & Waziri, Khalid Maman, 2017. "The Assimilation of Young Workers into the Labour Market in France: A Stochastic Earnings Frontier Approach," IZA Discussion Papers 10841, Institute for the Study of Labor (IZA).

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