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How Cyclical Is a Gap? Composition-Adjusted Evidence on the Gender Wage Gap

Author

Listed:
  • Pereira, João
  • Ramos, Raul
  • Martins, Pedro S.

Abstract

We propose a simple and novel approach to estimate the cyclicality of gaps using cross-sectional data. Our method controls for composition effects in contexts in which panel data cannot be leveraged. Our method also provides useful insights for assessing common trends in difference-in-differences analyses. We illustrate the approach studying the gender wag gap (GWG) in Portugal, finding that it is generally procyclical, except at the top of the distribution. This procyclicality stems from the unexplained component of the GWG rather than from differences in observed characteristics. The results also do not support the hypothesis that GWG cyclicality is driven by discrimination.

Suggested Citation

  • Pereira, João & Ramos, Raul & Martins, Pedro S., 2026. "How Cyclical Is a Gap? Composition-Adjusted Evidence on the Gender Wage Gap," GLO Discussion Paper Series 1746, Global Labor Organization (GLO).
    • Handle: RePEc:zbw:glodps:1746
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    References listed on IDEAS

    as
    1. Simon Freyaldenhoven & Christian Hansen & Jesse M. Shapiro, 2019. "Pre-event Trends in the Panel Event-Study Design," American Economic Review, American Economic Association, vol. 109(9), pages 3307-3338, September.
    2. Ashesh Rambachan & Jonathan Roth, 2023. "A More Credible Approach to Parallel Trends," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 90(5), pages 2555-2591.
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    More about this item

    Keywords

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    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
    • J82 - Labor and Demographic Economics - - Labor Standards - - - Labor Force Composition

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