Earnings Gap Research Articles

The Cost of Being ‘Backward’ in India: Socio-religious Discrimination in the Labour Market

Being from backward castes, classes and Muslims in India has an economic cost associated with the nature of institutional discrimination. Using the 2011–2012 National Sample Survey data, this study identifies that caste and religion still rule the modern Indian labour market. We find that discrimination is evident in the socio-religious earnings gaps. While the parametric decompositions suggest that most of these gaps are due to differential human capital endowment, the nonparametric method almost evenly attributes inequality to discrimination and endowment. The results presented in this study suggest that discrimination against Scheduled Castes and Scheduled Tribes, Muslims and Other Backward Classes should be included in policy designs to promote equity in the Indian labour market.

Electoral Competition, Voter Bias, and Women in Politics

Abstract We quantify the implications of voter bias and electoral competition for politicians’ gender composition. Unfavorable voters’ attitudes toward women and local gender earnings gap correlate negatively with the share of female candidates in Parliamentary elections. Using within-candidate variation across the different polling stations of an electoral district in a given election year, we find that female candidates obtain fewer votes in municipalities with higher gender earnings gaps. We show theoretically that when voters are biased against women, parties facing gender quotas select male candidates in the most contestable districts. We find empirical support for such a strategic party response to voter gender bias. Simulating our calibrated model confirms that competition significantly hinders the effectiveness of gender quotas.

Are we there yet? Intergenerational mobility and economic assimilation of second-generation immigrants in Estonia

ABSTRACT This study investigates the role of intergenerational mobility in explaining the native-immigrant income gap in Estonia. A rich registry dataset on yearly earnings and different background characteristics for the period of 2007–2017 is used. We find that an increase of 1 percentile in parent income rank is associated with on average 0.2 percentile increase in child income rank for both natives and second-generation immigrants. Results from a detailed Blinder-Oaxaca decomposition indicate that up to 21% of the gap between income ranks of second-generation immigrants and natives is related to differences in parental background. Once we control for education, family, residence and industry related choices, differences in the parental income rank account for around 8% of the overall gap. The results indicate that although the intergenerational income mobility is relatively high in Estonia both for natives and children of foreign-born, the native-immigrant earnings gap has not decreased for the second generation.

The gender earnings gap among elite athletes in semi-professional sports

ABSTRACT Research question This study examines gender differences in human capital, performance characteristics, and earnings among elite athletes in semi-professional sports in Germany. Research methods In 2018, a nationwide online survey of elite athletes supported by the German Sports Aid Foundation was conducted where they were asked about their life and earnings situation (n = 1064). Regression analyses were estimated to identify the role of gender while controlling for human capital and performance characteristics. Results and findings The results showed a significant gender earnings gap in favor of male athletes for annual earnings and calculatory wage rate. This gap is mainly driven by gender differences in earnings from work and public sport funding, while financial support from the German Sports Aid Foundation and from family/friends attenuated the gap. The results can be explained by treatment discrimination and male athletes’ preferences for current work, while female athletes invested significantly more time into studying/learning and their human capital, respectively. Implications The findings have implications for funding institutions as well as people involved in supporting elite athletes in semi-professional sports. Research contribution Since earnings data are typically not publicly available, this study relies on unique data to examine athletes’ earnings taking a gender perspective.

Determinants of Earnings and Gender Earnings Gaps among Highly Educated Workers within Major Cities in Asian Countries*

The present paper analyzes determinants of earnings and the gender earnings gap among highly educated younger workers from nine major cities in Asian countries. We identify skill premiums for both men and women in each city, such as holding a postgraduate degree or degrees in specific fields and experience working or studying abroad. These results show that competition for earnings among highly educated younger workers has been increasing in these cities. Furthermore, the results reveal that, despite being quite narrow, significant gender gaps do exist; the means of log female earnings in each city range between 95.6 and 97.9 percent of those of men. Individuals having natural science degrees or managerial positions possibly affects these small gender gaps in some cities.

The effect of task choice and task assignment on the gender earnings gap: An experimental study

Previous studies explain the gender earnings gap by gender differences in choosing competitive and higher-paying jobs. However, little is known about whether and how women’s earnings are affected when they choose more challenging jobs. In this study, we use a novel identification strategy to investigate 1) how the gender earnings gap arises from individuals’ self-selecting into different tasks and 2) whether mobilizing women to work on the tasks typically preferred by men increases women’s earnings and decreases the earnings gap. Our results show that men who prefer the hard and higher-paid task are more likely to obtain higher earnings regardless of the task they are assigned. In contrast, we find that women obtain higher earnings when they work on a hard and higher-paid task even if their initial take choice is the easy and lower-paid one. Our findings are consistent and robust across task stereotypes. Our results imply that mobilizing women to work on more challenging and rewarding tasks is likely to reduce the gender earnings gap.

The Distributional Impacts of Active Labor Market Programs for Indigenous Populations

We evaluate the distributional impacts of active labor market programming for indigenous peoples in Canada. Using administrative data and an empirical strategy that compares participants in high-intensity programs--skills interventions, job-creation partnerships, or wage subsidies--to those in low-intensity programs, such as employment assistance or job counseling, reveals large returns to high-intensity programming for above-median earnings. Returns are largest for women at the mean, suggesting that high-intensity programming may reduce gender gaps in earnings among participants, who represent 10 percent of all indigenous people in Canada. Larger returns at the top of the distribution indicate that overall inequality among participants could increase.

Assessing gender gaps in employment and earnings in Africa: The case of Eswatini

ABSTRACT Persistent gender gaps characterise labour markets in many African countries. Utilising Eswatini’s first three labour market surveys (conducted in 2007, 2010, and 2013), this paper provides first systematic evidence on the country’s gender gaps in employment and earnings. We find that women have notably lower employment rates and earnings than men, even though the global financial crisis had a less negative impact on women than it had on men. Both unadjusted and unexplained gender earnings gaps are higher in self-employment than in wage employment. Tertiary education and urban location account for a large part of the gender earnings gap and mitigate high female propensity to self-employment. Our findings suggest that policies supporting female higher education and rural-urban mobility could reduce persistent inequalities in Eswatini’s labour market outcomes as well as in other middle-income countries in southern Africa.

Two-Tier Earnings Structures and labour Market Reform

ABSTRACT Two-tier earnings structures have recently received renewed attention in the context of labour market reform, but relevant evidence for emerging economies is lacking. Relying on four waves of repeated cross-section individual-level micro data and Oaxaca-type earnings decompositions, this study investigates the interplay between the tightening of employment protection legislation in China through the introduction of the Labour Contract Law in 2008 and the earnings gap between covered and uncovered urban workers. It shows that in urban China average monthly earnings are significantly higher for workers with as compared to those without an employment contract and documents that labour market reform went hand in hand with a doubling in the log earnings gap. As there were no newly emerging differences in observable characteristics between the two groups of workers, this doubling was entirely due to reinforced impacts of differences in workers’ observable characteristics on earnings. Results are consistent with prominent theoretical models of a two-tier labour market, complement existing results for Europe and are robust to a wide range of alternative specifications, including those that addresses selection into labour force participation.

THE IMPACT OF THE ANTI-CORRUPTION CAMPAIGN ON INCOME DISTRIBUTION: EVIDENCE FROM CHINA

This paper provides the first systematic micro-level evidences on the effectiveness of anti-corruption campaign in disciplining public officials and its impact on income distribution. Based on China Household Income Project (CHIP) survey data 2007 and 2013, we found that party and government officials had significant hidden income and the public–private earnings gap was as high as 8% before the campaign. However, the hidden income become not significant and the earnings gap declined to [Formula: see text]18% in this post-campaign period. The regions inspected by central anti-corruption inspection groups experience larger public earnings penalties compared to the other regions. Overall, our findings suggest that the privilege of public officials declined sharply during this anti-corruption campaign.

Can multinational firms promote gender equality? The role of labour mobility

A long and well-established literature exists on the role of multinational enterprises (MNEs) in transferring technology around the globe, enhancing local productivity. However, we know very little about the impact of foreign direct investment (FDI) and multinational enterprises on gender policy and practice. In this research, we focus on the role of MNEs in potentially promoting female empowerment and gender equality in Brazil. First, the research performs a descriptive exercise on the gender composition and gender earnings gaps at MNEs versus domestic firms. Then, we ask whether workers moving from multinational to domestic firms can transfer information about gender practice, by exploring the relationship across domestic firms with various proportions of workers with previous experience in a multinational. Unfortunately, despite the many theoretical reasons to expect MNEs to support and transfer best practice in gender policy, these ideas are not borne out in the data. Multinational firms employ fewer women and exhibit higher gender earnings gaps than their domestic firm counterparts. For this reason, it is no surprise that domestic firms with high shares of former MNE workers are not different from domestic firms with fewer former MNE workers in terms of gender policy and practice. Our work emphasizes the need for domestic policy to enhance the status of women in the economy and the international community to support best practice in gender policy across all types of firms.

The gender wage gap in Mongolia: Sectoral segregation as a driving factor

AbstractThis paper examines the gender labor market inequality by focusing on changes in the male and female earnings gap in Mongolia, a resource‐rich transition country. Economic growth has accelerated based on a boom in the mining sector since the mid‐2000s. However, the gender wage gap has widened substantially over the past decade. We use published data from the labor force surveys in 2008 and 2018 to investigate gender wage gaps among full‐time workers at the mean and across the entire distribution. We find strong evidence of the glass ceiling, but without a sticky floor. Sectoral gender segregation and work–family reconciliation policies may be the leading causes of the glass ceiling.

The dynamics of gender earnings differentials: Evidence from establishment data

Despite dramatic workforce gains by women in recent decades, a substantial gender earnings gap persists and widens over the course of men's and women's careers. Since there are earnings differences across establishments, a key question is whether the widening of the gender pay gap arises from differences in career advances within the same establishment or from differential gains from job-to-job moves across establishments. Using a unique match between the 2000 Decennial Census of the United States and the Longitudinal Employer Household Dynamics (LEHD) data, we find that both channels are important and affect workers differently by education. For the college educated, the increasing gap is for the most part due to differential earnings growth within establishment. The establishment component explains only 27% of the widening of the total gender pay gap for this group. For workers without college degree, the establishment component is the main driver of the, relatively small, widening of the gender earnings gap. For both education groups, marriage plays a crucial role in the establishment component of the increasing earnings gap.

Earnings gap between men and women in the informal labor market in Cameroon

AbstractThis paper investigates the extent of gender earnings gap among informal labor market workers in Cameroon. We have used the 2010 employment and informal sector survey, the Heckman two‐step bivariate selection model, and the Neuman–Oaxaca–Ransom decomposition framework to address these concerns. We find that, compared to men, women are more likely to make the joint decision of participating in the labor market and choosing informal work. Findings also reveal that among informal workers, male workers have an earnings premium over their female counterparts. Returns to informal labor market experience are solidly consistent in narrowing the gender earnings gap. Among the self‐employed workers, male workers also enjoy an earnings premium. However, when the inverse Mills ratio is decomposed, the overall and the self‐employed gender discrimination virtually disappears. Meanwhile, female wage earners enjoy a wage premium and have an unambiguous education‐based advantage over their male counterparts. The implications of these findings support the wisdom that promoting the human capital development of the girl child would play a vital role in alleviating gender‐based differentials by eroding sociocultural conventions and advancing women's agency.

Valuing Personal Safety and the Gender Earnings Gap

Are there gender differences in the willingness to pay (WTP) for safer jobs? Using a laboratory experiment, we elicit participants’ WTP for an early (perceived ‘safer’) on-site shift. We find that women forego larger earnings in order to secure an early shift more than men do, with a safety concern about the late shift being a key driver, explaining up to 20% of the estimated gender gap. We do not observe a gender gap if the job can be completed remotely. Results are robust to controlling for morning-types, household and demographic characteristics, attitudes toward risk and uncertainty, victimization, and information provision about crime. Controlling for crime exposure reduces the estimated gender gap. Thus, our results suggest that policies that reduce gender disparities in safety concerns may affect women’s labor supply.

An Explanation of a Gender Earnings Gap in the Veterinary Profession

Analysis of a unique data set of U.S. veterinary firms and veterinarians provides evidence of significant differences in earnings between self-employed males and females. After controlling for important concomitant variables, including training and experience, self-employed female veterinarians generally own smaller clinics and have lower earnings than their male counterparts. This study considers which demographic/economic factors may be associated with observed gender differences in earnings. The gender gap for average earnings is about 44 percent; however, when controlling for certain characteristics, the gap narrows to as little as 23 percent, depending on the model specification. Firm size was found to be the strongest contributing factor in explaining the gender gap in earnings, and so, possible explanations for differences in firm size have also been discussed. Whilst the analysis is not conclusive, there is evidence that self-employed females may face customer discrimination, which may constrain the growth and size of female-owned firms. (JEL D21) Keywords: Gender differences, salaries, self-employment, veterinarians

Cumulative Disadvantage Dynamics for Palestinian Israeli Arabs in Israel’s Economy

Recruiting the cumulative advantage mechanism, this study explores how earnings inequality between dominant and minority groups in the same society unfolds over the life course. Jews and Palestinian Israeli Arabs in Israel’s economy provide the context for this study. We find that the earnings gap between the groups has widened over time, particularly among men. This trend is hardly mediated by education, since returns to education have increased at similar rates for both. This finding leaves discrimination a plausible explanation, as the net group membership effect is positive and growing in strength with time. Among women, by contrast, the entire earnings gap is explained by self-selection out of employment, particularly among the less-educated. The consequences of these findings for changes in earnings inequality between dominant and minority groups in divided societies are discussed.

Women’s Employment, Wages, and the Household

Gender inequality in the labour market is interconnected with unequal sharing of care responsibilities by gender at home. While the unequal treatment of men and women in the labour market is illegal, gender gaps in employment and earnings are a persistent feature of labour markets. It is challenging to distinguish women’s true preferences for combing work and family life from employers’ discrimination against women. Women’s preferences for staying at home, working part-time, or in non-standard employment forms are often believed to drive gender inequalities in the labour market. This view contradicts the finding that gender imbalances in combing work and care are often reflected in lower well-being of mothers and children. This article reviews a selection of papers on gender gaps in employment, earnings and well-being published recently by JFEI and prospects avenues for future research.

Formal credit usage and gender income gap: the case of farmers in Cambodia

PurposeThe purpose of this article is to analyze the factors that drive gender income differences among farmers in Cambodia with a focus on the role of formal credit.Design/methodology/approachTo decompose the gender income gap, this article employs the Blinder–Oaxaca decomposition technique, while a two-stage least square (2SLS) regression is also employed to check the causal effect of formal credit usage on earnings.FindingsResults show a positive effect of formal credit on farmers' earnings and the gender gap in formal credit usage is not found. Despite that, formal credit still contributes to the gender earnings gap with a higher return to credit usage for male farmers. This can be due to the difference in the level of education, financial literacy and other dimensions in favor of men, allowing them to use credit more effectively than women.Research limitations/implicationsThe findings underline the importance of boosting general and financial education among female farmers in Cambodia. Meanwhile, the expansion of access to financial services for women must be accompanied by policies addressing gender gaps in other economic and social dimensions, so that women are able to reap the potential benefit of using those financial services.Originality/valueLack of research focuses on the link between the gender gap in the use of financial services and the gender income gap. The significant gender gap in returns to formal credit usage found in this study demonstrates that the benefits of gender equity in access to and usage of financial services also depend on the effects of other indicators that policymakers must be aware of.

Immigrant–non‐immigrant wage differentials in Canada: A comparison between standard and non‐standard jobs

AbstractIt is well established that recent immigrants earn considerably less than their native‐born counterparts even after adjusting for differences in human capital. Another labour market trend has been the growth in non‐standard forms of employment. Since non‐standard forms of work are generally less desirable than standard jobs on a number of dimensions including earnings, this study examines the nexus between immigrant earnings and non‐standard employment to investigate if there is a systemic connection between the two trends. Consistent with earlier research evidence, we find a substantial earnings disadvantage associated with all forms of non‐standard work relative to full‐time, permanent employment. Conditioning on observable characteristics, immigrants are less likely to be employed in full‐time, permanent work. However, when we examine workers in non‐standard jobs, we find that immigrant–non‐immigrant earnings gaps are smaller than those observed among workers in standard jobs. Moreover, the unadjusted mean earnings of long‐term immigrants in part‐time jobs are actually higher than the earnings of similarly employed Canadian‐born workers. Finally, considering immigrants from Western and non‐Western countries, we find that the earnings disadvantage of non‐Western immigrants in non‐standard jobs is smaller than the earnings disadvantage of non‐Western immigrants in standard jobs. These findings suggest that non‐standard jobs provide a point of entry for many new immigrants into the Canadian labour market. But whether these jobs are a bridge to upward mobility or whether they act as traps from which immigrants are unable to escape is a question that needs to be answered with better longitudinal data that track specific cohorts of workers.