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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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File URL: http://www.ecineq.org/milano/WP/ECINEQ2006-40.pdf
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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
Contact details of provider: Web page: http://www.ecineq.org
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  1. Coral Río & Carlos Gradín & Olga Cantó, 2011. "The measurement of gender wage discrimination: the distributional approach revisited," Journal of Economic Inequality, Springer, vol. 9(1), pages 57-86, March.
  2. Wiji Arulampalam & Alison Booth & Mark L. Bryan, 2006. "Is There a Glass Ceiling over Europe? Exploring the Gender Pay Gap across the Wages Distribution," CEPR Discussion Papers 510, Centre for Economic Policy Research, Research School of Economics, Australian National University.
  3. 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.
  4. 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.
  5. Hilary Hoynes & Marianne Page & Ann Stevens, 2005. "Poverty in America: Trends and Explanations," NBER Working Papers 11681, National Bureau of Economic Research, Inc.
  6. 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.
  7. Francine D. Blau & Lawrence M. Kahn, 2001. "Understanding International Differences in the Gender Pay Gap," NBER Working Papers 8200, National Bureau of Economic Research, Inc.
  8. Ghazala Azmat & Maia Güell & Alan Manning, 2003. "Gender Gaps in Unemployment Rates in OECD Countries," Working Papers 137, Barcelona Graduate School of Economics.
  9. Jenkins, Stephen P., 1994. "Earnings discrimination measurement : A distributional approach," Journal of Econometrics, Elsevier, vol. 61(1), pages 81-102, March.
  10. 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.
  11. 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.
  12. 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.
  13. Barbara Petrongolo, 2004. "Gender Segregation in Employment Contracts," CEP Discussion Papers dp0637, Centre for Economic Performance, LSE.
  14. Albelda, Randy, 1999. "Women and poverty: Beyond earnings and welfare," The Quarterly Review of Economics and Finance, Elsevier, vol. 39(5), pages 723-742.
  15. 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.
  16. Chinhui Juhn & Kevin M. Murphy, 1996. "Wage Inequality and Family Labor Supply," NBER Working Papers 5459, National Bureau of Economic Research, Inc.
  17. Mercedes Sastre & Alain Trannoy, 2002. "Shapley inequality decomposition by factor components: Some methodological issues," Journal of Economics, Springer, vol. 9(1), pages 51-89, December.
  18. Shorrocks, A F, 1982. "Inequality Decomposition by Factor Components," Econometrica, Econometric Society, vol. 50(1), pages 193-211, January.
  19. Barbara Petrongolo, 2004. "Gender segregation in employment contracts," LSE Research Online Documents on Economics 3662, London School of Economics and Political Science, LSE Library.
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