Does education raise productivity and wages equally? The moderating role of age and gender

Wage inequalities are argued to be associated with a difference in the education and productivity ofworkers: workers with a higher education earn higher wages ceteris paribus because they are moreproductive. However, this explanation has been challenged by empirical and theoretical research onlabour markets. Recent literature has found other mechanisms that explain pay inequality such asdistinct social processes or firms’ strategies to address market distortions. The abundance oftheories is, nevertheless, not matched by a corresponding body of empirical literature. This paperseeks to fill the gap by analysing Belgian linked panel data. Findings show that educational level hasa higher impact on productivity than on wages. It is especially pronounced in the case of youngerand female workers. This empirical paper, thus, finds evidence of the effect of workers’ gender andage on the (mis)alignment of wages across educational groups. In addition, the authors argue thatfemale low-income workers are more affected by labour market regulations such as minimum wagerequirements or unemployment benefits.