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Poverty and Women’s Labor Market Activity: the Role of Gender Wage Discrimination in the EU

  • Carlos Gradín

    (Universidade de Vigo (Spain))

  • Olga Cantó


    (Universidade de Vigo (Spain))

  • Coral del Río


    (Universidade de Vigo (Spain))

The functioning of the labor market often has been stressed as a clear determinant in explaining poverty trends in developed countries. In this paper, we analyze the role of gender wage discrimination on household poverty rates in several EU countries, linking two related phenomena that rarely are analyzed together. In order to quantify the impact of discrimination on poverty, we propose the construction of a counterfactual distribution of wages where discrimination against women has been removed. Using this new wage distribution, we compute total household income and compare poverty rates in the absence of discrimination to those actually observed. Our results show that, in general, it is true that discrimination against women plays a determinant role in the current levels of poverty, even if we discover that results for each country present a different pattern and intensity. Further, we find that the effect of discrimination on poverty risk dramatically increases for individuals in households who largely depend on working female earnings, especially in the case of single mothers.

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Paper provided by ECINEQ, Society for the Study of Economic Inequality in its series Working Papers with number 40.

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Length: 45 pages
Date of creation: 2006
Date of revision:
Handle: RePEc:inq:inqwps:ecineq2006-40
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  1. Jenkins, Stephen P., 1994. "Earnings discrimination measurement : A distributional approach," Journal of Econometrics, Elsevier, vol. 61(1), pages 81-102, March.
  2. Wiji Arulampalam & Alison L. Booth & Mark L. Bryan, 2007. "Is There a Glass Ceiling over Europe? Exploring the Gender Pay Gap across the Wage Distribution," ILR Review, Cornell University, ILR School, vol. 60(2), pages 163-186, January.
  3. Ghazala Azmat & Maia Güell & Alan Manning, 2004. "Gender Gaps in Unemployment Rates in OECD Countries," CEP Discussion Papers dp0607, Centre for Economic Performance, LSE.
  4. Joseph G. Altonji & Rebecca M. Blank, . "Race and Gender in the Labor Market," IPR working papers 98-18, Institute for Policy Resarch at Northwestern University.
  5. Coral del Río & Carlos Gradín & Olga Cantó, 2006. "The measurement of gender wage discrimination: The distributional approach revisited," Working Papers 25, ECINEQ, Society for the Study of Economic Inequality.
  6. Francine D. Blau, 1998. "Trends in the Well-Being of American Women, 1970-1995," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 112-165, March.
  7. Lynn Karoly & Gary Burtless, 1995. "Demographic change, rising earnings inequality, and the distribution of personal well-being, 1959–1989," Demography, Springer, vol. 32(3), pages 379-405, August.
  8. Antecol, Heather, 2000. "An examination of cross-country differences in the gender gap in labor force participation rates," Labour Economics, Elsevier, vol. 7(4), pages 409-426, July.
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  10. Mary C. Daly & Robert G. Valletta, 2006. "Inequality and Poverty in United States: The Effects of Rising Dispersion of Men's Earnings and Changing Family Behaviour," Economica, London School of Economics and Political Science, vol. 73(289), pages 75-98, 02.
  11. Chinhui Juhn & Kevin M. Murphy, 1996. "Wage Inequality and Family Labor Supply," NBER Working Papers 5459, National Bureau of Economic Research, Inc.
  12. Olga Cantó, 2003. "Finding out the Routes to Escape Poverty: The Relevance of Demographic vs. Labor Market Events in Spain," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 49(4), pages 569-588, December.
  13. Albelda, Randy, 1999. "Women and poverty: Beyond earnings and welfare," The Quarterly Review of Economics and Finance, Elsevier, vol. 39(5), pages 723-742.
  14. Mercedes Sastre & Alain Trannoy, 2002. "Shapley inequality decomposition by factor components: Some methodological issues," Journal of Economics, Springer, vol. 77(1), pages 51-89, December.
  15. Hilary Hoynes & Marianne Page & Ann Stevens, 2005. "Poverty in America: Trends and Explanations," NBER Working Papers 11681, National Bureau of Economic Research, Inc.
  16. Francine D. Blau & Lawrence M. Kahn, 2003. "Understanding International Differences in the Gender Pay Gap," Journal of Labor Economics, University of Chicago Press, vol. 21(1), pages 106-144, January.
  17. Reed, Deborah & Cancian, Maria, 2001. "Sources of Inequality: Measuring the Contributions of Income Sources to Rising Family Income Inequality," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 47(3), pages 321-33, September.
  18. Barbara Petrongolo, 2004. "Gender segregation in employment contracts," LSE Research Online Documents on Economics 3662, London School of Economics and Political Science, LSE Library.
  19. Shorrocks, A F, 1982. "Inequality Decomposition by Factor Components," Econometrica, Econometric Society, vol. 50(1), pages 193-211, January.
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