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The Gender Pay Gap for Private Sector Employees in Canada and Britain

  • Marie Drolet
  • Karen Mumford

This paper uses British and Canadian linked employer-employee data to investigate the importance of the workplace for the gender wage gap. Implementing a novel decomposition approach, we find substantial unexplained wage gaps in the private sector of both countries. Whilst this wage differential is partially offset by women, on average, receiving a workplace specific return which is relatively higher than that paid to men, a substantial and significant unexplained within workplace wage gap remains which is considerably higher in Britain than in Canada. The results are consistent with a prima facie argument that country-specific factors, such as the wage setting environment, are important determinants in explaining the relative size of the gender wage gap.

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Paper provided by Department of Economics, University of York in its series Discussion Papers with number 09/28.

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Handle: RePEc:yor:yorken:09/28
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  1. Karen Mumford & Peter N. Smith, 2003. "Determinants of current job tenure: a cross country comparison," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 6(3), pages 435-451, September.
  2. Francine D. Blau & Lawrence M. Kahn, 2003. "Understanding International Differences in the Gender Pay Gap," Journal of Labor Economics, University of Chicago Press, vol. 21(1), pages 106-144, January.
  3. Anne Daly & Xin Meng & Akira Kawaguchi & Karen Mumford, 2006. "The Gender Wage Gap in Four Countries," The Economic Record, The Economic Society of Australia, vol. 82(257), pages 165-176, 06.
  4. Kimberly Bayard & Judith Hellerstein & David Neumark & Kenneth Troske, 1999. "New Evidence on Sex Segregation and Sex Differences in Wages from Matched Employee-Employer Data," NBER Working Papers 7003, National Bureau of Economic Research, Inc.
  5. Michael Baker & Nicole M. Fortin, 1999. "Occupational Gender Composition and Wages in Canada: 1987-1988," NBER Working Papers 7371, National Bureau of Economic Research, Inc.
  6. Linda Dickens, 2007. "The Road is Long: Thirty Years of Equality Legislation in Britain," British Journal of Industrial Relations, London School of Economics, vol. 45(3), pages 463-494, 09.
  7. Tracy Regan & Ronald Oaxaca, 2009. "Work experience as a source of specification error in earnings models: implications for gender wage decompositions," Journal of Population Economics, Springer, vol. 22(2), pages 463-499, April.
  8. Ronald L. Oaxaca & Michael R. Ransom, 1999. "Identification in Detailed Wage Decompositions," The Review of Economics and Statistics, MIT Press, vol. 81(1), pages 154-157, February.
  9. Stewart, Mark B, 1983. "On Least Squares Estimation When the Dependent Variable Is Grouped," Review of Economic Studies, Wiley Blackwell, vol. 50(4), pages 737-53, October.
  10. Manning, Alan & Petrongolo, Barbara, 2007. "The Part-Time Pay Penalty for Women in Britain," CEPR Discussion Papers 6058, C.E.P.R. Discussion Papers.
  11. Marie Drolet, 2002. "Can the workplace explain Canadian gender pay differentials?," New Zealand Economic Papers, Taylor & Francis Journals, vol. 36(1), pages 75-77.
  12. Altonji, Joseph G. & Blank, Rebecca M., 1999. "Race and gender in the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 48, pages 3143-3259 Elsevier.
  13. Xin Meng & Dominique Meurs, 2004. "The gender earnings gap: effects of institutions and firms--a comparative study of French and Australian private firms," Oxford Economic Papers, Oxford University Press, vol. 56(2), pages 189-208, April.
  14. Connolly, Sara & Gregory, Mary, 2007. "Moving Down: Women’s Part-time Work and Occupational Change in Britain 1991–2001," IZA Discussion Papers 3106, Institute for the Study of Labor (IZA).
  15. Gary S. Becker, 1962. "Investment in Human Capital: A Theoretical Analysis," Journal of Political Economy, University of Chicago Press, vol. 70, pages 9.
  16. Karen Mumford & Peter N Smith, . "The Gender Earnings Gap in Britain," Discussion Papers 04/05, Department of Economics, University of York.
  17. Ronald Oaxaca, 1971. "Male-Female Wage Differentials in Urban Labor Markets," Working Papers 396, Princeton University, Department of Economics, Industrial Relations Section..
  18. Richard Disney & Amanda Gosling, 2008. "Changing public sector wage differentials in the UK," IFS Working Papers W08/02, Institute for Fiscal Studies.
  19. Mueller, Richard E., 1998. "Public-private sector wage differentials in Canada: evidence from quantile regressions," Economics Letters, Elsevier, vol. 60(2), pages 229-235, August.
  20. Marie Drolet, 2002. "Can the Workplace Explain Canadian Gender Pay Differentials?," Canadian Public Policy, University of Toronto Press, vol. 28(s1), pages 41-63, May.
  21. John M. Abowd & John C. Haltiwanger & Julia I. Lane, 2004. "Integrated Longitudinal Employee-Employer Data for the United States," Longitudinal Employer-Household Dynamics Technical Papers 2004-02, Center for Economic Studies, U.S. Census Bureau.
  22. Erica L. Groshen, 1987. "The structure of the female/male wage differential: is it who you are, what you do, or where you work?," Working Paper 8708, Federal Reserve Bank of Cleveland.
  23. Alan S. Blinder, 1973. "Wage Discrimination: Reduced Form and Structural Estimates," Journal of Human Resources, University of Wisconsin Press, vol. 8(4), pages 436-455.
  24. Rhys Davies & Richard Welpton, 2008. "How Does Workplace Monitoring Affect the Gender Wage Differential? Analysis of the Annual Survey of Hours and Earnings and the 2004 Workplace Employment Relations Survey - A Research Note," British Journal of Industrial Relations, London School of Economics, vol. 46(4), pages 732-749, December.
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