Relative labor supply and the gender wage Gap: Evidence for Colombia and the United States
Under imperfect substitution between men and women and no discrimination, a higher relative supply of labor by women should reduce female wages as compared to male wages. By contrast, under gender discrimination and perfect substitution, an increase in the relative labor supply of women should reduce the gender wage gap. Using a simple conceptual framework and 20 years of cross-sectional wage data from both the United States and Colombia, empirical tests on the relationship between relative labor supply and the gender wage gap suggest that discrimination is a more important issue than imperfect substitution. The evidence is especially strong in Colombia.
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