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Decomposing Gender Wage Gaps: A Family Economics Perspective

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  • Averkamp, Dorothée

    (University of Wuppertal)

  • Bredemeier, Christian

    (University of Wuppertal)

  • Juessen, Falko

    (University of Wuppertal)

Abstract

We show that parts of the unexplained wage gap in standard Oaxaca-Blinder decompositions result from the neglect of the role played by the family for individual wages. We present a simple model of dual-earner households facing a trade-off regarding whose career to promote and show analytically that the standard Oaxaca-Blinder approach overestimates the degree of pay discrimination. Unbiased decompositions can be obtained when the Oaxaca-Blinder wage equation is augmented by the characteristics of the individual's partner. In an empirical application, we find that this extended decomposition explains considerably larger shares of the gender wage gap than does the standard decomposition.

Suggested Citation

  • Averkamp, Dorothée & Bredemeier, Christian & Juessen, Falko, 2020. "Decomposing Gender Wage Gaps: A Family Economics Perspective," IZA Discussion Papers 13601, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp13601
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    References listed on IDEAS

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    1. Francine D. Blau & Lawrence M. Kahn, 2006. "The U.S. Gender Pay Gap in the 1990S: Slowing Convergence," ILR Review, Cornell University, ILR School, vol. 60(1), pages 45-66, October.
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    3. Claudia Olivetti & Barbara Petrongolo, 2016. "The Evolution of Gender Gaps in Industrialized Countries," Annual Review of Economics, Annual Reviews, vol. 8(1), pages 405-434, October.
    4. Artuç, Erhan & McLaren, John, 2015. "Trade policy and wage inequality: A structural analysis with occupational and sectoral mobility," Journal of International Economics, Elsevier, vol. 97(2), pages 278-294.
    5. Claudia Olivetti & Barbara Petrongolo, 2016. "The Evolution of Gender Gaps in Industrialized Countries," Annual Review of Economics, Annual Reviews, vol. 8(1), pages 405-434, October.
    6. Claudia Goldin, 2014. "A Grand Gender Convergence: Its Last Chapter," American Economic Review, American Economic Association, vol. 104(4), pages 1091-1119, April.
    7. Francine D. Blau & Lawrence M. Kahn & Matthew Comey & Amanda Eng & Pamela Meyerhofer & Alexander Willén, 2020. "Culture and gender allocation of tasks: source country characteristics and the division of non-market work among US immigrants," Review of Economics of the Household, Springer, vol. 18(4), pages 907-958, December.
    8. Patricia Cortés & Jessica Pan, 2019. "When Time Binds: Substitutes for Household Production, Returns to Working Long Hours, and the Skilled Gender Wage Gap," Journal of Labor Economics, University of Chicago Press, vol. 37(2), pages 351-398.
    9. repec:pri:indrel:dsp01gb19f581g is not listed on IDEAS
    10. Bredemeier, Christian, 2019. "Gender Gaps in Pay and Inter-Firm Mobility," IZA Discussion Papers 12785, Institute of Labor Economics (IZA).
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    Cited by:

    1. Man Yao & Tori I. Rehr & Erica P. Regan, 2023. "Gender Differences in Financial Knowledge among College Students: Evidence from a Recent Multi-institutional Survey," Journal of Family and Economic Issues, Springer, vol. 44(3), pages 693-713, September.
    2. Derek T. Tharp & Elizabeth J. Parks-Stamm & Meghaan Lurtz & Michael Kitces, 2022. "Exploring Gender Differences in Marital and Parental Income Premiums Among Financial Advisors," Journal of Family and Economic Issues, Springer, vol. 43(1), pages 15-35, March.

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    More about this item

    Keywords

    dual-earner households; gender wage gap; Oaxaca-Blinder; discrimination;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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