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Job Assignment and the Gender Wage Differential: Theory and Evidence on Finnish Metalworkers


  • Vartiainen, Juhana

    (Trade Union Institute for Economic Research)


We study the determinants of the gender wage differential by using a data set on Finnish blue-collar metalworkers. The assignment of men and women into jobs of different complexity is a key factor that widens the final wage differential. Using the theory of optimal job assignment, we propose a model of individual productivity, ability and job complexity and formulate a hypothesis of asymmetric assignment according to which men and women of equal ability are allocated to different job levels. Using econometric panel data techniques, we find support for this hypothesis. The results are consistent with the Lazear-Rosen model of job ladders but can alternatively be interpreted as evidence for gender discrimination in job assignment.

Suggested Citation

  • Vartiainen, Juhana, 1999. "Job Assignment and the Gender Wage Differential: Theory and Evidence on Finnish Metalworkers," Working Paper Series 149, Trade Union Institute for Economic Research.
  • Handle: RePEc:hhs:fiefwp:0149

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    References listed on IDEAS

    1. Sattinger, Michael, 1993. "Assignment Models of the Distribution of Earnings," Journal of Economic Literature, American Economic Association, vol. 31(2), pages 831-880, June.
    2. Lazear, Edward P, 1986. "Salaries and Piece Rates," The Journal of Business, University of Chicago Press, vol. 59(3), pages 405-431, July.
    3. Sattinger, Michael, 1979. "Differential Rents and the Distribution of Earnings," Oxford Economic Papers, Oxford University Press, vol. 31(1), pages 60-71, March.
    4. Amemiya, Takeshi & MaCurdy, Thomas E, 1986. "Instrumental-Variable Estimation of an Error-Components Model," Econometrica, Econometric Society, vol. 54(4), pages 869-880, July.
    5. Lazear, Edward P & Rosen, Sherwin, 1990. "Male-Female Wage Differentials in Job Ladders," Journal of Labor Economics, University of Chicago Press, vol. 8(1), pages 106-123, January.
    6. Teulings, Coen N, 1995. "The Wage Distribution in a Model of the Assignment of Skills to Jobs," Journal of Political Economy, University of Chicago Press, vol. 103(2), pages 280-315, April.
    7. van Ophem, Hans & Hartog, Joop & Vijverberg, Wim P M, 1993. "Job Complexity and Wages," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 34(4), pages 853-872, November.
    8. Sattinger, Michael, 1975. "Comparative Advantage and the Distributions of Earnings and Abilities," Econometrica, Econometric Society, vol. 43(3), pages 455-468, May.
    9. A. D. Roy, 1951. "Some Thoughts On The Distribution Of Earnings," Oxford Economic Papers, Oxford University Press, vol. 3(2), pages 135-146.
    10. 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.
    11. Winter-Ebmer, Rudolf & Zweimuller, Josef, 1997. "Unequal Assignment and Unequal Promotion in Job Ladders," Journal of Labor Economics, University of Chicago Press, vol. 15(1), pages 43-71, January.
    12. Breusch, Trevor S & Mizon, Grayham E & Schmidt, Peter, 1989. "Efficient Estimation Using Panel Data," Econometrica, Econometric Society, vol. 57(3), pages 695-700, May.
    13. Heckman, James J & Sedlacek, Guilherme, 1985. "Heterogeneity, Aggregation, and Market Wage Functions: An Empirical Model of Self-selection in the Labor Market," Journal of Political Economy, University of Chicago Press, vol. 93(6), pages 1077-1125, December.
    14. Oaxaca, Ronald L. & Ransom, Michael R., 1994. "On discrimination and the decomposition of wage differentials," Journal of Econometrics, Elsevier, vol. 61(1), pages 5-21, March.
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    Cited by:

    1. Pekkarinen, Tuomas, 2002. "Complexity, wages, and the O-ring production function: evidence from Finnish panel data," Labour Economics, Elsevier, vol. 9(4), pages 531-546, September.

    More about this item


    Wage Differentials; Labor-Management Relations; Discrimination;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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