Unexplained Wage Gap Research Articles

Glass ceiling or sticky floor? Evidence from a distributional approach of the gender wage gap among PhD holders in South Korea

This study examines the gender wage gap, to explore whether a glass ceiling (large unexplained wage gaps in the upper percentiles) or sticky floor (large unexplained wage gaps in the lower percentiles) exists in the wage distribution of the most educated Koreans. This study focuses on seeking these distributional patterns for a theoretically homogeneous gender group, relying on a smaller dataset of PhD holders. Counterfactual methods combining recentered influence function decomposition with propensity score matching allow us to estimate how the wage gap between statistically similarly matched males and females, varies across the unconditional wage distribution. There is evidence of a strong sticky floor and a limited glass ceiling among Korean PhD holders. Results show that a negative relationship between a high level of education and the gender wage gap cannot be taken for granted, at least in South Korea. Even female PhD holders suffer from gender discrimination, especially when they are at the bottom end of the wage distribution.

Intersections and Commonalities: Using Matching to Decompose Wage Gaps by Gender and Nativity in Germany

We investigate intersecting wage gaps by gender and nativity by comparing the wages between immigrant women, immigrant men, native women, and native men based on Western German survey data. Adding to the analytical diversity of the field, we do a full comparison of group wages to emphasize the relationality of privilege and disadvantage, and we use a nonparametric matching decomposition that is well suited to address unique group-specific experiences. We find that wage (dis)advantages associated with the dimensions of gender and nativity are nonadditive and result in distinct decomposition patterns for each pairwise comparison. After accounting for substantial group differences in work attachment, individual resources, and occupational segregation, unexplained wage gaps are generally small for comparisons between immigrant women, immigrant men, and native women, but large when either group is compared to native men. This finding suggests that the often presumed “double disadvantage” of immigrant women is rather a “double advantage” of native men.

Worse than a double whammy: The intersectional causes of wage inequality between women of colour and White men over time

AbstractWe evaluate the causes of the wage gap at the intersection of race, ethnicity and gender over time in the United States. We analyse the wage gaps for women of colour along three dimensions: relative to White women, relative to men of their respective race/ethnicity, and relative to White men. Using the American Community Survey, we replicate earlier findings based on the Current Population Survey data which show that, on average, Black women face an unexplained wage gap relative to White men that goes beyond the simple addition of the separate unexplained gender and racial wage gaps. This can be seen persistently between 1980 and 2019, and we find it is true across the entire wage distribution but especially notable at higher centiles. From 1990 through 2019, Black and Hispanic women saw stalled progress, while White women continued to make steady progress closing the wage gap relative to White men.

The Gender Wage Gap in Peru: Drivers, Evolution, and Heterogeneities

Despite the recent economic growth and gender equality improvement in educational attainment, important gender disparities remain in the Peruvian labour market. This article provides a comprehensive overview of the Peruvian gender wage gap evolution during 2007–2018 and identifies key elements that explain its patterns. First, the article shows that the raw wage gap showed an upward trend between 2007–2011, ranging from 6% to 12%, and remaining around that top bound ever since. Second, using Oaxaca‐Blinder decomposition we find that the unexplained wage gap has remained virtually unchanged at around 17% during the study period. Reductions in endowment differences between men and women coupled with a stagnant unexplained gap led to slightly larger raw wage gaps over time. Moreover, the stagnant unexplained gap suggests the presence of structural problems regarding social norms, gender stereotyping and potential discrimination that affects the wage gap. Third, we show that both at a national and regional level, gender wage gaps are larger within the lowest percentiles, and they mostly have a downward slope across the earnings distribution. Finally, after computing the raw and unexplained gap at the region‐year level, we show that smaller regional gender gaps are associated with (a) higher GDP, (b) lower levels of domestic physical violence against women, and (c) lower percentages of women as household heads.

Wage gap between men and women in Israel

ABSTRACT Using the Mincer equation and the Oaxaca decomposition, this article examines what part of the gender wage gap in Israel during the years 2005–16 can be explained by differences in demographic attributes and preferences of men and women and what part cannot be explained by these variables, hence indicates gender discrimination. Findings show that during the examined period, there was no systematic change in the unexplained wage gap. However, in the years 2017–18, the unexplained wage gap between men and women began to decrease.

Rising Female Labor Force Participation and Gender Wage Gap: Evidence From Turkey

This paper investigates the relation between female activity in the labor market and gender wage gaps using regional data from Turkey. Labor force participation of women in Turkey significantly lags behind the developed countries but is increasing. At the same time, raw gender wage gap is quite low in international standards but also increasing. I use the regional variation to analyze the relation between female labor force participation and wage gaps in two steps. First, I estimate the unexplained wage gap, which filters out the gender differences in productivity characteristics for each region and each year between 2009 and 2018, using Household Labor Force Survey data. Then I analyze the relation between gender gap with female labor force participation and other regional characteristics in a panel data regression. The results of the paper suggest that female labor force participation is positively related with both raw and unexplained wage gap. This positive relation partially stems from the fact that women with less unobservable skills or career motivation enter into labor force in the process of increase in female employment rate.

About time: the narrowing gender wage gap in Austria

We examine the gender wage gap in Austria from 2005 to 2017 using data from EU-SILC. The raw gap of hourly wages declined from 18.6 log points in 2005 to 14.9 log points in 2017. We use standard decomposition techniques that correct for differences in the distributions of human capital and other variables between men and women. Decompositions of the wage gap indicate that both the explained and the unexplained part of the gender wage gap decreased substantially over the last ten years. Using the approach developed by Neumark (J Hum Resour 22:279–295, 1988), the unexplained wage gap shrank from 8.7 log points in 2005 to 5.1 log points in 2017. The main reason for the decline in wage differences was the relative improvement of women’s observed and unobserved characteristics.

Are Female CFOs Different? Evidence from Gender Pay Gaps

Studies document an unexplained wage gap between male and female workers even as female workers have increased their human capital through skill and education. At the executive level, where skill and education are similar, the results on gender-based pay gap persist and are primarily attributed to career interruptions and differences in risk preferences. Tracing the compensation contracts of Execucomp firms (1992-2018), this study observes a nonexistent gap in compensation between genders among CFOs. In fact, female CFOs earn more than male CFOs in the later sample years. This paper offers several explanations for this phenomenon e.g. new evidence on risk preferences of females with financial expertise and changes in the social and regulatory climate.

Decomposing Gender Wage Gaps: A Family Economics Perspective

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.

Wage Gap in an Ethnically Segmented Labor Market: The Role of Cognitive Skills

We analyzed the ethnic wage gap in Estonia that hosts a large Russian-speaking minority population. We used the Oaxaca-Blinder decomposition to test whether the observed wage gap among the working population is related to commonly unobserved skills. Data from the Estonian Labor Force Survey and the Programme for the International Assessment of Adult Competencies (PIAAC) have been used. We find that the three PIAAC skills combination lowered the estimated unexplained wage differential by approximately 20%. We conclude that the unexplained wage gap is most likely related to entry barriers, combined with low-level segregation and segregated social networks.

Women and Work in India: Descriptive Evidence and a Review of Potential Policies

Sustained high economic growth since the early 1990s has brought significant change to the lives of Indian women, and yet female labor force participation has stagnated at under 30%, and recent labor surveys even suggest some decline since 2005. Using a nationally representative household survey, we lay out five descriptive facts about female labor force participation in India that help identify constraints to higher participation. First, there is significant demand for jobs by women currently not in the labor force. Second, willing female non-workers have difficulty matching to jobs. Third, obtaining vocational training is correlated with a higher likelihood of working among women. Fourth, women are more likely to be working in sectors where the gender wage gap and unexplained wage gap, commonly attributed to discrimination, is higher. Finally, female-friendly policies, including quotas, are correlated with higher female participation in some key sectors. Combining these facts with a review of the literature, we map out important areas for future investigation and highlight how policies such as employment quotas and government initiatives focused on skilling and manufacturing should be better investigated and leveraged to increase women’s economic activity.

Can Personality Traits Explain Glass Ceilings?

This paper investigates whether personality traits can explain glass ceilings (increasing gender wage gaps across the wage distribution). Using longitudinal survey data from Germany, the UK, and Australia, I combine unconditional quantile regressions with wage gap decompositions to identify the effect of personality traits on wage gaps. The results suggest that the impact of personality traits on wage gaps increases across the wage distribution in all countries. Personality traits explain up to 14.5% of the overall gender wage gap. However, controlling for personality traits does not lead to a significant reduction of unexplained wage gaps in most cases.

The wage penalty for motherhood: Evidence on discrimination from panel data and a survey experiment for Switzerland

Background: Survey-based research finds a sizeable unexplained wage gap between mothers and nonmothers in affluent countries. The source of this wage gap is unclear: It can stem either from the unobserved effects of motherhood on productivity or from employer discrimination against mothers. Objective: This paper opens the black box of the motherhood wage gap by directly measuring discrimination in Switzerland based on two complementary methods. Methods: We first use two longitudinal population surveys to establish the size of the wage residual for motherhood. We then run a factorial survey experiment among HR managers (N=714) whom we asked to assign a starting wage to the resumes of fictitious job candidates. Results: The population surveys show an unexplained wage penalty per child of 4% to 8%. The factorial survey experiment shows that recruiters assign wages to mothers that are 2% to 3% below those of nonmothers. The wage penalty is larger for younger mothers, 6% for ages 40 and less, but disappears for older mothers or mothers in a blue-collar occupation. Conclusions: The motherhood wage gap found in panel studies cannot be reduced to unobserved dimensions of work productivity. The experimental evidence shows that recruiters discriminate against mothers. Contribution: Our paper’s novelty is to uncover wage discrimination against mothers by combining two different methods. Our national panel surveys mirror the supply side of the labor market and provide us with strong external validity. The factorial survey experiment on recruiters informs on the demand side of the labor market and shows a causal effect.

Gender-specific human capital: identification and quantifying its wage effects

PurposeThe purpose of this paper is to better understand the possible reasons behind gender pay disparities, focussing on the unique features of male and female human capital and their wage returns. Despite increasing convergence of male and female human capital attainments, substantial differences remain. Extraction of human capital components non-overlapping across genders provides more profound explanation of the unexplained wage gap of men and women.Design/methodology/approachStarting with the non-parametric matching-based decomposition technique, the authors extend the pay gap estimation framework and focus on males and females having no counterpart in a set of characteristics within the opposite gender. The authors identify gender-unique human capital in terms of differences in distribution of individual characteristics across men and women and gender-specific combination of human capital characteristics. Wage returns to gender-specific profiles are evaluated applying wage regression on both full distribution of earnings and wage quantiles. The research relies on the Survey of Adult Skills (PIAAC) database for Estonia, which incorporates both formal education and cognitive skill records.FindingsThe study identifies sets of characteristics and competencies exclusive for both genders, proving that male and female profiles cannot be directly compared. The results suggest that men possess high individual and combined abilities in numeracy and problem solving in technology-rich environment, not always reached by females. This potentiates men’s higher earnings in spite of their generally lower formal educational attainments. Wage gap analysis over the full distribution of earnings shows even larger “glass ceiling” effect for females, possessing woman-specific human capital.Originality/valueThe authors raise a research from a novel perspective towards a role of human capital in gender wage inequality. Instead of usual reference to observable gaps in male and female characteristics, the authors identify the gender-specific human capital profiles, to a large extent non-reached by the opposite gender. Analysed associations between gender-specific characteristics and earnings provide an insight to possible effects of gender-unique human capital on a male-female wage disparity.

Do you get what you ask? The gender gap in desired and realised wages

PurposeThe purpose of this paper is to study gender differences in wage bargaining by comparing the unexplained wage gap in desired, realised and reservation wages.Design/methodology/approachThe notion of desired wages is applied, which shows workers’ first bet to potential employers during the job-search process. A large job-search data set is drawn from the main Estonian electronic job-search site CV Keskus.FindingsIt is found that the unexplained gender wage gap is around 20 per cent in desired wages and in realised wages, which supports the view that the gender income gap in expectations compares well with the realised income gap. The unexplained gender wage gap is larger in desired wages than in reservation wages for unemployed individuals, and this suggests that women ask for wages that are closer to their reservation wages men do. Occupational and sectoral mobility is unable to explain a significant additional part of the gender wage gap.Originality/valueThe paper adds to the scarce empirical evidence on the role of the non-experimental wage negotiation process in the gender wage gap. In addition, the authors seek to explain one of the largest unexplained gender wage gaps in Europe, the one in Estonia, by introducing a novel set of variables for occupational and sectoral mobility from a lengthy retrospective panel.

Gender wage differential in private and public sector employment

PurposeThis paper aims to analyse the magnitude of the gender wage disparity in the public and private sectors in Mauritius across both mean differentials and overall wage distribution. The paper then decomposed the gender wage differential using the Oaxaca and Blinder (1973) decomposition technique.Design/methodology/approachThe study uses cross-sectional data from the Continuous Multi-Purpose Household Budget Survey (CMPHS), from 2006 to 2013. The sample size on average is around 12,000 households surveyed per year.FindingsThe results reveal that that gender wage differentials are prevalent in both economic sectors; however, the disparity is more pronounced in the private sector. In addition, the differences in wages are larger at the bottom compared to the top end of the wage distribution, suggesting the presence of sticky floors. Lastly, it was observed that the unexplained wage gap (discrimination) is higher in the private sector than in public sector across the years.Originality/valueThe literature on the gender wage gap in Africa is limited. This paper adds to the existing literature on gender wage differential with an analysis of the gender wage disparity across the public and private sectors in Mauritius.

Family-friendly policies and women's wages – is there a trade-off? Skill investments, occupational segregation and the gender pay gap in Germany, Sweden and the UK

ABSTRACTRecent research has suggested that there is a trade-off between the ‘family-friendliness’ of jobs, occupations and welfare states on the one hand and women's relative wages on the other. In particular, the extensive family policies found in Scandinavia are thought to harm highly educated women by affecting occupational segregation and workplace skill development. In this article, we use pooled wage data from the European Social Survey of 2004 and 2010 to examine the mechanisms behind the gender wage gap in Germany, Sweden and the UK and compare the situation of high- and low-skilled employees. Our findings show that the gender wage gap among high-skilled employees in Sweden is larger than in the UK, but not larger than in Germany. Also, segregation and work-related training are no more important in Sweden than in the other countries. Another important finding is that the mechanisms behind the gender wage gap differ between high- and low-skilled employees in ways not predicted by the trade-off argument. In particular, the large unexplained wage gap among high-skilled employees provides new theoretical challenges.

Gender wage gap in Estonia: a non-parametric decomposition

Estonia has the highest gender wage gap in the European Union and the highest degree of gender segregation by occupation and industry. Previous studies have found that most of the gap remains unexplained by personal and job characteristics. However, key job characteristics, occupation and industry, are usually imprecisely measured, leading to the question of whether all relevant characteristics have been properly taken into account in the decompositions. In this paper, we perform the decomposition of the wage gap to see how much of the wage gap remains unexplained after using more detailed data than has been common in previous studies (the Estonian Structure of Earnings Study data set), and discuss the related methodological challenges. Using a non-parametric method that takes into account differences in supports of distributions of male and female workers’ characteristics, we find that using more detailed data does not eliminate the unexplained wage gap: about half of the wage gap remains unexplained even using the full set of available variables.

Occupational Characteristics and the Obesity Wage Penalty

This paper demonstrates that obese women are more likely to work in jobs that emphasize physical activity, but they are less likely to work in jobs that emphasize public interaction. The same patterns in occupational characteristics do not exist for obese men. In light of prior literature finding an unexplained wage gap between obese women and non-obese women, these results are particularly relevant since physical activity jobs pay relatively less on average, while public interaction jobs pay relatively more. Moreover, the few obese women who work in public interaction occupations receive lower wages than non-obese women, and their wage penalty offsets the general premium to working in a job emphasizing public interaction. Together, these results suggest that taste-based discrimination may be driving occupational sorting among obese women and, as a result, is at least one source of the wage penalty experienced by obese women.

Social networks and labor market inequality between ethnicities and races

AbstractThis paper analyzes the relationship between unexplained racial/ethnic wage differentials on the one hand and social network segregation, as measured by inbreeding homophily, on the other. Our analysis is based on both the US and Estonian surveys, supplemented with the Estonian telephone communication data. In the case of Estonia we consider the regional variation in economic performance of the Russian minority, and in the US case we consider the regional variation in black--white differentials. Our analysis finds a strong relationship between the size of the wage differential and network segregation: Regions with more segregated social networks exhibit larger unexplained wage gaps.