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Selection, Heterogeneity and the Gender Wage Gap

  • Machado, Cecilia

    ()

    (Fundação Getúlio Vargas)

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    Selection correction methods usually make assumptions about selection itself. In the case of gender wage gap estimation, those assumptions are specially tenuous because of high female non-participation and because selection could be different in different parts of the labor market. This paper proposes an estimator for the wage gap that allows for arbitrary heterogeneity in selection. It applies to the subpopulation of "always employed" women, which is similar to men in labor force attachment. Using CPS data from 1976 to 2005, I show that the gap has narrowed substantially from a -.521 to a -.263 log wage points differential for this population.

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    File URL: http://ftp.iza.org/dp7005.pdf
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    Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7005.

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    Length: 64 pages
    Date of creation: Nov 2012
    Date of revision:
    Handle: RePEc:iza:izadps:dp7005
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    1. Claudia Olivetti & Barbara Petrongolo, 2005. "Unequal Pay or Unequal Employment? A Cross-Country Analysis of Gender Gaps," Boston University - Department of Economics - Macroeconomics Working Papers Series WP2005-003, Boston University - Department of Economics, revised Oct 2008.
    2. Derek Neal, 2002. "The Measured Black-White Wage Gap Among Women is Too Small," NBER Working Papers 9133, National Bureau of Economic Research, Inc.
    3. Angrist, Joshua D & Evans, William N, 1998. "Children and Their Parents' Labor Supply: Evidence from Exogenous Variation in Family Size," American Economic Review, American Economic Association, vol. 88(3), pages 450-77, June.
    4. Heckman, James J, 1974. "Shadow Prices, Market Wages, and Labor Supply," Econometrica, Econometric Society, vol. 42(4), pages 679-94, July.
    5. Martha J. Bailey & Brad Hershbein & Amalia R. Miller, 2012. "The Opt-In Revolution? Contraception and the Gender Gap in Wages," NBER Working Papers 17922, National Bureau of Economic Research, Inc.
    6. Casey B. Mulligan & Yona Rubinstein, 2008. "Selection, Investment, and Women's Relative Wages Over Time," The Quarterly Journal of Economics, MIT Press, vol. 123(3), pages 1061-1110, August.
    7. Willis, Robert J, 1987. "What Have We Learned from the Economics of the Family?," American Economic Review, American Economic Association, vol. 77(2), pages 68-81, May.
    8. Jane Waldfogel, 1998. "Understanding the "Family Gap" in Pay for Women with Children," Journal of Economic Perspectives, American Economic Association, vol. 12(1), pages 137-156, Winter.
    9. Katz, Lawrence & Goldin, Claudia, 2002. "The Power of the Pill: Oral Contraceptives and Women's Career and Marriage Decisions," Scholarly Articles 2624453, Harvard University Department of Economics.
    10. Francis Vella, 1998. "Estimating Models with Sample Selection Bias: A Survey," Journal of Human Resources, University of Wisconsin Press, vol. 33(1), pages 127-169.
    11. Pierre-Andre Chiappori & Sonia Oreffice & Climent Quintana-Domeque, 2011. "Fatter Attraction: Anthropometric and Socioeconomic Matching on the Marriage Market," Discussion Papers 1011-06, Columbia University, Department of Economics.
    12. Edward Vytlacil, 2002. "Independence, Monotonicity, and Latent Index Models: An Equivalence Result," Econometrica, Econometric Society, vol. 70(1), pages 331-341, January.
    13. Martin Huber & Blaise Melly, 2012. "A test of the conditional independence assumption in sample selection models," Working Papers 2012-11, Brown University, Department of Economics.
    14. Juhn, Chinhui & Murphy, Kevin M, 1997. "Wage Inequality and Family Labor Supply," Journal of Labor Economics, University of Chicago Press, vol. 15(1), pages 72-97, January.
    15. Gronau, Reuben, 1974. "Wage Comparisons-A Selectivity Bias," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1119-43, Nov.-Dec..
    16. Browning, Martin, 1992. "Children and Household Economic Behavior," Journal of Economic Literature, American Economic Association, vol. 30(3), pages 1434-75, September.
    17. Heckman, James J, 1990. "Varieties of Selection Bias," American Economic Review, American Economic Association, vol. 80(2), pages 313-18, May.
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