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Decomposing Gender Wage Gaps - A Family Economics Perspective

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  • Averkamp, Dorothée
  • Bredemeier, Christian
  • Juessen, Falko

Abstract

We show that parts of the unexplained wage gap in standard Oaxaca-Blinder decompositions result from the neglect of the role played by the family for individual wages. We present a simple model of dual-earner households facing a trade-off regarding whose career to promote and show analytically that the standard Oaxaca-Blinder approach overestimates the degree of pay discrimination. Unbiased decompositions can be obtained when the Oaxaca-Blinder wage equation is augmented by the characteristics of the individual's partner. In an empirical application, we find that this extended decomposition explains considerably larger shares of the gender wage gap than does the standard decomposition.

Suggested Citation

  • Averkamp, Dorothée & Bredemeier, Christian & Juessen, Falko, 2021. "Decomposing Gender Wage Gaps - A Family Economics Perspective," VfS Annual Conference 2021 (Virtual Conference): Climate Economics 242361, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc21:242361
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    References listed on IDEAS

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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
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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