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Getting what (employers think) you’re worth: Evidence on the gender gap in entry wages among university graduates

Author

Listed:
  • Julia Bredtmann
  • Sebastian Otten

Abstract

Purpose - – The purpose of this paper is to provide empirical evidence on the gender wage differential of labor market entrants and the determinants of their starting wages. Design/methodology/approach - – The paper makes use of a unique data set on graduates in economics from a large German university that contains detailed information on the graduates’ course of study, their additional qualifications and their transition from university to the labor market. Based on these data, Mincer-type earnings functions as well as wage decompositions as proposed by Blinder (1973) and Oaxaca (1973) are performed. Findings - – The paper finds a significant gender wage differential of 7 percent. Blinder-Oaxaca decompositions suggest that the major part of this gap remains unexplained by gender differences in observable characteristics. Research limitations/implications - – The main feature of our analysis – having a highly homogeneous sample of graduates from a single university – comes at the costs of reduced ability to draw generalized conclusions from our findings. Originality/value - – This paper investigates the determinants of entry wages for a homogeneous group of high-skilled workers using a unique data set of graduates in business and economics from a large German university. Concentrating on a highly homogeneous sample limits the problem of unobserved heterogeneity, which results in an overestimation of the unexplained component of standard decompositions analyses. Hence, the finding that a large part of the gender pay gap remains unexplained can be considered as an indicator for gender discrimination in the labor market for economics graduates.

Suggested Citation

  • Julia Bredtmann & Sebastian Otten, 2014. "Getting what (employers think) you’re worth: Evidence on the gender gap in entry wages among university graduates," International Journal of Manpower, Emerald Group Publishing, vol. 35(3), pages 291-305, May.
  • Handle: RePEc:eme:ijmpps:v:35:y:2014:i:3:p:291-305
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    References listed on IDEAS

    as
    1. Hugo Ñopo, 2008. "Matching as a Tool to Decompose Wage Gaps," The Review of Economics and Statistics, MIT Press, vol. 90(2), pages 290-299, May.
    2. Julia Bredtmann, 2014. "The Intra-household Division of Labor: An Empirical Analysis of Spousal Influences on Individual Time Allocation," LABOUR, CEIS, vol. 28(1), pages 1-39, March.
    3. Bachmann, Ronald & Bauer, Thomas K. & David, Peggy, 2010. "Labor Market Entry Conditions, Wages and Job Mobility," IZA Discussion Papers 4965, Institute of Labor Economics (IZA).
    4. repec:zbw:rwirep:0188 is not listed on IDEAS
    5. 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.
    6. Nils Braakmann, 2008. "Non scholae, sed vitae discimus! - The importance of fields of study for the gender wage gap among German university graduates during labor market entry and the first years of their careers," Working Paper Series in Economics 85, University of Lüneburg, Institute of Economics.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Bünstorf, Guido & Krabel, Stefan, 2014. "Gender and Immigration: Double Negative Effects in the Labor Market Outcomes of University Graduates in Germany?," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100290, Verein für Socialpolitik / German Economic Association.
    2. Denise Jackson, 2020. "Accounting and Finance Graduate Employment Outcomes: Underemployment, Self‐employment and Managing Diversity," Australian Accounting Review, CPA Australia, vol. 30(3), pages 193-205, September.
    3. Katja Görlitz & Barbara S. Grave, 2012. "Wage Differentials by Field of Study – The Case of German University Graduates," Ruhr Economic Papers 0316, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    4. repec:zbw:rwirep:0316 is not listed on IDEAS
    5. Barbara S. Grave & Katja Goerlitz, 2012. "Wage differentials by field of study -- the case of German university graduates," Education Economics, Taylor & Francis Journals, vol. 20(3), pages 284-302, March.

    More about this item

    Keywords

    Discrimination; Earnings; Pay differentials; Further education;

    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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