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The role of employment experience in explaining the gender wage gap

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  • Michal Myck

    () (Institute for Fiscal Studies and Centre for Economic Analysis (CenEA))

  • Gillian Paull

    (Institute for Fiscal Studies)

Abstract

Over the last two decades, the wage gap between men and women has narrowed, yet a sizeable discrepancy in earnings capacity remains between seemingly identical male and female workers. Analyses of the role of employment experience in explaining this gender wage gap have been limited by the rarity of appropriate data sources containing this information. In this paper, data from a series of twenty cross sections of the British Family Expenditure Survey is used to examine the changing impact of employment experience on the wage differential across four cohorts of male and female workers. By using grouped data formed into a pseudo panel and by estimating the wage regressions in first differences rather than levels, the potential for estimation bias arising from unobserved heterogeneity and the endogeneity of experience is reduced. The results show that accounting for differences in experience levels, either as a simple total of all years of employment or broken down into full-time and part-time employment, explains little of the gender wage gap. Indeed, it is differences in the returns to experience which generate the gender wage differential, for the gap only develops and widens as experience increases. Successive generations of female workers have are found to have faired considerably better than previous cohorts in terms of their wage position relative to men. However, this development is not explained by relative changes in education level or experience between men and women.

Suggested Citation

  • Michal Myck & Gillian Paull, 2001. "The role of employment experience in explaining the gender wage gap," IFS Working Papers W01/18, Institute for Fiscal Studies.
  • Handle: RePEc:ifs:ifsewp:01/18
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    1. World Bank, 2007. "Chile - County Gender Assessment : Expanding Women's Work Choices to Enhance Chile's Economic Potential," World Bank Other Operational Studies 7639, The World Bank.
    2. Neil Foster-McGregor & Sebastian Leitner & Sandra M. Leitner & Johannes Pöschl & Robert Stehrer, 2014. "Earnings Distributions and Dimensions of Inequality," wiiw Research Reports 399, The Vienna Institute for International Economic Studies, wiiw.
    3. Grzegorz Kula & Anna Ruzik-Sierdzińska, 2011. "Institutional uncertainty and retirement decisions in Poland," Working Papers 2011-17, Faculty of Economic Sciences, University of Warsaw.
    4. Almudena Sevilla-Sanz & Mark L. Bryan, 2007. "Does Housework Lower Wages and Why? Evidence for Britain," Economics Series Working Papers 331, University of Oxford, Department of Economics.
    5. Angel de la Fuente & Antonio Ciccone, 2003. "Human capital in a global and knowledge-based economy," Working Papers 70, Barcelona Graduate School of Economics.
    6. Alan Manning & Joanna Swaffield, 2008. "The gender gap in early-career wage growth," Economic Journal, Royal Economic Society, vol. 118(530), pages 983-1024, July.
    7. Christophe Nordman & François Roubaud, 2005. "Reassessing the Gender Wage Gap: Does Labour Force Attachment Really Matter? Evidence from Matched Labour Force and Biographical Surveys in Madagascar," Working Papers 16, ECINEQ, Society for the Study of Economic Inequality.
    8. Callan, Tim & van de Ven, Justin & Keane, Claire & O'Connell, Philip J., 2012. "A Framework for Pension Policy Analysis in Ireland: PENMOD, a Dynamic Simulation Model," Book Chapters,in: Callan, Tim (ed.), Analysing Pensions: Modelling and Policy Issues, pages 43-101 Economic and Social Research Institute (ESRI).
    9. Dr Justin van de Ven & Dr Martin Weale, 2009. "A Structural Dynamic Micro-Simulation Model for Policy Analysis: Application to Pension Reform, Income Tax Changes and Rising Life Expectancy," National Institute of Economic and Social Research (NIESR) Discussion Papers 336, National Institute of Economic and Social Research.
    10. Elżbieta Stępień, 2009. "The Impact of International Trade and Foreign Competition on Labour Earnings in Poland," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 24.

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    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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