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Estimating a Dynamic Adverse Selection Model: Labor Force Experience and the Changing Gender Earnings Gap 1968-93

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Abstract

This paper addresses two questions: What accounts for the gender gap in labor-market outcomes? What are the driving forces behind the changes in the gender-labor-market out- comes over the period 1968–97? It formulates a dynamic general equilibrium model of labor supply, occupational sorting and human capital accumulation in which gender discrimination and an earnings gap arise endogenously. It uses this model to quantify the driving forces behind the decline in the gender earnings gap and the increase in women’s labor-force participation, professional-occupation representation and hours worked. It …nds that labor-market experience is the most important factor explaining the gender earnings gap. In addition, statistical dis- crimination accounts for a large fraction of the observed gender earnings gap and its decline. It also …nds that a large increase in aggregate productivity in professional occupations plays a major role in the increase in women’s labor-force participation, professional-occupation repre- sentation and hours worked. Although of less importance, demographic changes account for a substantial part of the increase in female labor-force participation and hours worked, whereas home-production technology shocks do not.

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  • George-Levi Gayle & Limor Golan, "undated". "Estimating a Dynamic Adverse Selection Model: Labor Force Experience and the Changing Gender Earnings Gap 1968-93," GSIA Working Papers 2006-E40, Carnegie Mellon University, Tepper School of Business.
  • Handle: RePEc:cmu:gsiawp:1143615504
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    Cited by:

    1. Zvi Eckstein & Osnat Lifshitz, 2011. "Dynamic Female Labor Supply," Econometrica, Econometric Society, vol. 79(6), pages 1675-1726, November.
    2. George-Levi Gayle & Limor Golan & Robert A. Miller, 2012. "Gender Differences in Executive Compensation and Job Mobility," Journal of Labor Economics, University of Chicago Press, vol. 30(4), pages 829-872.
    3. Claudia Olivetti & Barbara Petrongolo, 2016. "The Evolution of Gender Gaps in Industrialized Countries," Annual Review of Economics, Annual Reviews, vol. 8(1), pages 405-434, October.
    4. Kai Liu, 2016. "Explaining the gender wage gap: Estimates from a dynamic model of job changes and hours changes," Quantitative Economics, Econometric Society, vol. 7(2), pages 411-447, July.

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