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When Opportunity Knocks: Confronting Theory and Empirics about Dynamics of Gender Wage Inequality

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  • Tyrowicz, Joanna

    (University of Warsaw)

  • van der Velde, Lucas

    (GRAPE)

Abstract

We present empirical evidence that large structural shocks are followed by changes in labor market inequality. Specifically, we study short-run fluctuations in adjusted gender wage gaps (unequal pay for equal work) following episodes of structural shocks in the labor markets, using several decades of individual data for a wide selection of transition countries. We find that for cohorts who entered the labor market after the onset of transition. Labor market shocks lead to significant declines in the gender wage gap. This decrease is driven mostly by episodes experienced among cohorts who enter the labor market during the transition. By contrast, we fail to find any significant relation for cohorts already active in the labor market at the time of transition. We provide plausible explanations based on sociological and economic theories of inequality.

Suggested Citation

  • Tyrowicz, Joanna & van der Velde, Lucas, 2021. "When Opportunity Knocks: Confronting Theory and Empirics about Dynamics of Gender Wage Inequality," IZA Discussion Papers 14027, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp14027
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    More about this item

    Keywords

    non-parametric estimates; transition; gender wage gap; worker flows;
    All these keywords.

    JEL classification:

    • C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models; Threshold Regression Models
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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