Age dynamics of the gender wage gap: An analysis with matched employer-employee microdata for Spain

Abstract

The aim of this research is to provide new evidence on the evolution of the gender wage gap by age using matched employer-employee microdata for Spain, taking into account changes across generations with respect to the age dynamics of the pay gap. We propose a wage equation controlling for age effects and their differences by gender. We estimate this equation by year taking advantage of overlapping cross-sectional microdata. We then calculate the variation of the gender wage gap for individuals with the same age but belonging to different generations as each wave of our data encompasses common birth cohorts. Our results suggest that the gender wage gap in the case of Spain tends to decrease both over time and across generations. By contrast, it tends to widen as women get older, which is consistent with previous research for other countries. These trends are robust to changes in the wage equation specification and apply even for comparisons of very similar men and women working at very similar firms. In fact, segregation appears to play an important role in the evolution of the gender wage gap along the career.