Abstract
The aim of this paper is to evaluate the role played by selectivity issues induced by nonemployment in explaining gender wage gap patterns in the EU since the onset of the Great Recession. We show that male selection into the labour market, traditionally disregarded, has increased. This is particularly the case in peripheral European countries, where dramatic drops in male unskilled jobs have taken place during the crisis. As regards female selection, traditionally positive, we document mixed findings. While it has declined in some countries, as a result of increasing female LFP due to an added-worker effect, it has become even more positive in other countries. This is due to adverse labour demand shifts in industries which are intensive in temporary work where women are over-represented. These adverse shifts may have more than offset the rise in unskilled female labour supply.
Highlights
In this paper we look at how changes in selection into the labour market by men and women have impinged on the evolution of gender wage gaps since the beginning of the Great Recession (GR in short)1 We focus on this period because the scale of employment adjustments have been very large during the recent slump, and these shifts are the ones that often underlie selection decisions into the labour market
To identify which of the arguments laid out above are more likely to hold in different areas of Europe, we propose the following three hypotheses and derive their main testable implications:
We report both RG and PG in levels, selection biases and employment rates by gender in 2007, at the onset of the GR, and the corresponding change between 2007 and 2012
Summary
In this paper we look at how changes in selection into the labour market by men and women have impinged on the evolution of gender wage gaps since the beginning of the Great Recession (GR in short) We focus on this period because the scale of employment adjustments have been very large during the recent slump, and these shifts are the ones that often underlie selection decisions into the labour market. The GR in Europe covers the global financial crisis in 2008-09 and includes the subsequent sovereign debt crisis in the Euro area from late 2009 to mid 2012. Observed Change 45 degree line NLD ESP DNK FRA GER PRT ITA FIN AUT UK BEL NOR GRC
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