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Swimming Upstream, Floating Downstream: Trends in the U.S. and Danish Gender Wage Gaps

  • Gubta, Nabanita Datta

    ()

    (Centre for Labour Market and Social Research, Aarhus School of Business)

  • Oaxaca, Ronald L.

    (The University of Arizona)

  • Smith, Nina

    ()

    (Centre for Labour Market and Social Research, Aarhus School of Business)

While the gender wage gap has reduced considerably in the U.S. since the late 1970s, in Denmark it has virtually stagnated over the same period. Using the U.S. CPS and the Danish Longitudinal Sample data, we compare the development in the gender wage gaps in these two countries between 1983-1995 in both time-series and microeconometric analyses. We present a new decomposition methodology that is anchored on the overall wage distribution and show that the difference in the rates of convergence of the wage gaps in the two countries in this period can be explained by inter-country differences in the wage effects of observed skill prices and gender differences in selectivity. In Denmark, these effects have wiped out any gains arising from women's skill- improvement. In the U.S., these effects have not offset women's wage gains due to skill-improvement. Decompositions at different deciles of the distribution show that women at the highest decile in Denmark have the biggest increase in the wage gap in this period, primarily due to unobservables. In the U.S., the decline in the wage gap is largest at the top and at the middle of the distribution.

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Paper provided by University of Aarhus, Aarhus School of Business, Centre for Labour Market and Social Research in its series CLS Working Papers with number 01-6.

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Length: 40 pages
Date of creation: 27 Jun 2002
Date of revision:
Handle: RePEc:hhs:aarcls:2001_006
Contact details of provider: Postal: The Aarhus School of Business, Prismet, Silkeborgvej 2, DK 8000 Aarhus C, Denmark
Phone: +45 89 48 66 88
Fax: + 45 86 15 01 88
Web page: http://www.cls.dk

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  1. Gupta, N.D. & Smith, N., 2000. "Children and Career Interruptions: the Family Gap in Denmark," Papers 00-03, Centre for Labour Market and Social Research, Danmark-.
  2. Rosholm, Michael & Smith, Nina, 1996. "The Danish Gender Wage Gap in the 1980s: A Panel Data Study," Oxford Economic Papers, Oxford University Press, vol. 48(2), pages 254-79, April.
  3. David Neumark, 1988. "Employers' Discriminatory Behavior and the Estimation of Wage Discrimination," Journal of Human Resources, University of Wisconsin Press, vol. 23(3), pages 279-295.
  4. Albrecht, James & Björklund, Anders & Vroman, Susan, 2001. "Is There a Glass Ceiling in Sweden?," IZA Discussion Papers 282, Institute for the Study of Labor (IZA).
  5. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
  6. Francine D. Blau & Lawrence M. Kahn, 2000. "Gender Differences in Pay," NBER Working Papers 7732, National Bureau of Economic Research, Inc.
  7. Christopher J. Ruhm, 1996. "The Economic Consequences of Parental Leave Mandates: Lessons from Europe," NBER Working Papers 5688, National Bureau of Economic Research, Inc.
  8. Gupta, N.D. & Oaxaca, R.L. & Smith, N., 1998. "Wage Dispersion, Public Sector Wages and the Stagnating Danish Gender Wage Gap," Papers 98-18, Centre for Labour Market and Social Research, Danmark-.
  9. Blackaby, D. H. & Murphy, P. D. & O'Leary, N. C., 1999. "The payment of public sector workers in the UK: reconciliation with North American findings," Economics Letters, Elsevier, vol. 65(2), pages 239-243, November.
  10. Blau, Francine D & Kahn, Lawrence M, 1992. "The Gender Earnings Gap: Learning from International Comparisons," American Economic Review, American Economic Association, vol. 82(2), pages 533-38, May.
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