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

Author

Listed:
  • 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)

Abstract

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.

Suggested Citation

  • Gubta, Nabanita Datta & Oaxaca, Ronald L. & Smith, Nina, 2002. "Swimming Upstream, Floating Downstream: Trends in the U.S. and Danish Gender Wage Gaps," CLS Working Papers 01-6, University of Aarhus, Aarhus School of Business, Centre for Labour Market and Social Research.
    • Handle: RePEc:hhs:aarcls:2001_006
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    References listed on IDEAS

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    Cited by:

    1. Claudia Olivetti, 2008. "Gender and the Labour Market: An International Perspective and the Case of Italy," Rivista di Politica Economica, SIPI Spa, vol. 98(3), pages 3-32, May-June.
    2. Christopher J. Gerry & Byung-Yeon Kim & Carmen A Li, 2004. "The gender wage gap and wage arrears in Russia: Evidence from the RLMS," Journal of Population Economics, Springer;European Society for Population Economics, vol. 17(2), pages 267-288, June.
    3. Albrecht, James & van Vuuren, Aico & Vroman, Susan, 2004. "Decomposing the Gender Wage Gap in the Netherlands with Sample Selection Adjustments," IZA Discussion Papers 1400, Institute of Labor Economics (IZA).
    4. Albrecht, James & van Vuuren, Aico & Vroman, Susan, 2009. "Counterfactual distributions with sample selection adjustments: Econometric theory and an application to the Netherlands," Labour Economics, Elsevier, vol. 16(4), pages 383-396, August.
    5. Westergaard-Nielsen, Niels, 2001. "Danish Labour Market Policy: Is it worth it?," CLS Working Papers 01-10, University of Aarhus, Aarhus School of Business, Centre for Labour Market and Social Research.
    6. Kaya, Ezgi, 2014. "Gender Wage Gap Trends in Europe: The Role of Occupational Allocation and Skill Prices," Cardiff Economics Working Papers E2014/23, Cardiff University, Cardiff Business School, Economics Section.
    7. Filippin, Antonio & Ichino, Andrea, 2005. "Gender wage gap in expectations and realizations," Labour Economics, Elsevier, vol. 12(1), pages 125-145, February.
    8. Lausten, M., 2001. "Gender differences in managerial compensation - Evidences from Denmark," Papers 01-4, Aarhus School of Business - Department of Economics.

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    JEL classification:

    • J70 - Labor and Demographic Economics - - Labor Discrimination - - - General

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