Explaining the Dynamics of the Gender Gap in Lifetime Earnings

Using a long administrative panel dataset for France, we analyse the dynamics and drivers of the narrowing gender gap in lifetime earnings (LTE) for cohorts born after WWII. We find that the level, trends, and distribution of gender differences in LTE contrast sharply with those observed in the US, and that these differences are more marked than when we compare cross-sectional gender gaps. We show that this reflects a specific pattern in which both men and women experienced earnings gains over the whole distribution (with the exception of the very top), in contrast with the US, where the same cohorts of men experienced earnings losses in the three bottom quartiles of the distribution. We then decompose the changing role of various factors (e.g., working (part) time, education, occupation, geographical location) in shaping the evolution of the gender LTE gap in France. The contribution of unobserved factors decreases across cohorts and increases along the distribution, remaining larger at the top, consistent with a glass ceiling effect. Meanwhile, the impact of observed factors rises, mostly due to the decline in the years worked full time by women, which has slowed gender convergence. Differences in educational attainment contribute to a lesser extent, as the gender gap in returns to education has narrowed.