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When Do Gender Wage Differences Emerge? A Study of Azerbaijan's Labor Market

Author

Listed:
  • Pastore, Francesco

    (Università della Campania Luigi Vanvitelli)

  • Sattar, Sarosh

    (World Bank)

  • Sinha, Nistha

    (World Bank)

  • Tiongson, Erwin R.

    (World Bank)

Abstract

Building on recent analyses that find a sizeable, overall gender wage gap in Azerbaijan's workforce, this paper uses data on young workers in their early years in the labor market to understand how gender wage gaps evolve over time, if at all. Using a unique database from a survey of young people age 15-29 years old, we provide evidence that new labor market entrants begin with little or no gender differences in earnings, but a wage gap gradually emerges over time closer to the childbearing years. The gender wage gap grows from virtually zero, or even a small, positive gap in favor of women, until the age of 20 years to about 20% two years later and even more than 30% at the age of 29 years. The gap in labor supply rises from almost zero to about 20% during the years from 19 to 22, while the gap in hours worked falls from positive (up to 6 hours per week more than their male counterparts) to negative (up to -5 hours per week) over the same period in the life cycle. When decomposing the gap at different deciles of the wage distribution, it appears that most of it is at the lower and upper end of the distribution, among young adults and the prime-age workers. Selection of women into employment is strong and strongly skill- based: when controlling for sample selection bias, the gender gap becomes positive.

Suggested Citation

  • Pastore, Francesco & Sattar, Sarosh & Sinha, Nistha & Tiongson, Erwin R., 2016. "When Do Gender Wage Differences Emerge? A Study of Azerbaijan's Labor Market," IZA Discussion Papers 9660, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp9660
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    References listed on IDEAS

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    1. Francesco Pastore & Alina Verashchagina, 2011. "When does transition increase the gender wage gap?," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 19(2), pages 333-369, April.
    2. José Mata & José A. F. Machado, 2005. "Counterfactual decomposition of changes in wage distributions using quantile regression," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(4), pages 445-465.
    3. Psacharopoulos, George, 1994. "Returns to investment in education: A global update," World Development, Elsevier, vol. 22(9), pages 1325-1343, September.
    4. Marianne Bertrand & Claudia Goldin & Lawrence F. Katz, 2010. "Dynamics of the Gender Gap for Young Professionals in the Financial and Corporate Sectors," American Economic Journal: Applied Economics, American Economic Association, vol. 2(3), pages 228-255, July.
    5. Del Bono, Emilia & Vuri, Daniela, 2011. "Job mobility and the gender wage gap in Italy," Labour Economics, Elsevier, vol. 18(1), pages 130-142, January.
    6. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-442, June.
    7. Francesco Pastore & Sarosh Sattar & Erwin Tiongson, 2013. "Gender differences in earnings and labor supply in early career: evidence from Kosovo’s school-to-work transition survey," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-34, December.
    8. Munich, Daniel & Svejnar, Jan & Terrell, Katherine, 2005. "Is women's human capital valued more by markets than by planners?," Journal of Comparative Economics, Elsevier, vol. 33(2), pages 278-299, June.
    9. Francesco Pastore, 2010. "Returns to education of young people in Mongolia," Post-Communist Economies, Taylor & Francis Journals, vol. 22(2), pages 247-265.
    10. Francesco Pastore, 2010. "The gender gap in early career in Mongolia," International Journal of Manpower, Emerald Group Publishing, vol. 31(2), pages 188-207, May.
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    Cited by:

    1. Tamar Khitarishvili, 2018. "Gender Pay Gaps in the Former Soviet Union: A Review of the Evidence," Economics Working Paper Archive wp_899, Levy Economics Institute.
    2. Asadullah, Niaz & Wahhaj, Zaki, 2016. "Missing from the Market: Purdah Norm and Women's Paid Work Participation in Bangladesh," IZA Discussion Papers 10463, Institute of Labor Economics (IZA).
    3. Katie Meara & Francesco Pastore & Allan Webster, 2020. "The gender pay gap in the USA: a matching study," Journal of Population Economics, Springer;European Society for Population Economics, vol. 33(1), pages 271-305, January.
    4. Francesco Pastore & Allan Webster, 2017. "Is the gender pay gap in the us just the result of gender segregation at work?," BAFES Working Papers BAFES08, Department of Accounting, Finance & Economic, Bournemouth University.
    5. Vicente Garcia Moreno & Harry Anthony Patrinos, 2019. "Returns to Education in Azerbaijan: Some New Estimates," Problems of Economic Transition, Taylor & Francis Journals, vol. 61(6), pages 411-425, June.

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    More about this item

    Keywords

    gender wage gap and dynamics; early labor market outcomes; school-to-work transitions; earnings equations; decomposition analysis;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J7 - Labor and Demographic Economics - - Labor Discrimination
    • P30 - Economic Systems - - Socialist Institutions and Their Transitions - - - General

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