Monday, January 25, 2016

Gender Wage gap

There is a new NBER working paper:
by Francine D. Blau and Lawrence M. Kahn

The abstract reads:
"Using PSID microdata over the 1980-2010, we provide new empirical evidence on the extent of and trends in the gender wage gap, which declined considerably over this period. By 2010, conventional human capital variables taken together explained little of the gender wage gap, while gender differences in occupation and industry continued to be important. Moreover, the gender pay gap declined much more slowly at the top of the wage distribution that at the middle or the bottom and by 2010 was noticeably higher at the top. We then survey the literature to identify what has been learned about the explanations for the gap. We conclude that many of the traditional explanations continue to have salience. Although human capital factors are now relatively unimportant in the aggregate, women’s work force interruptions and shorter hours remain significant in high skilled occupations, possibly due to compensating differentials. Gender differences in occupations and industries, as well as differences in gender roles and the gender division of labor remain important, and research based on experimental evidence strongly suggests that discrimination cannot be discounted. Psychological attributes or noncognitive skills comprise one of the newer explanations for gender differences in outcomes. Our effort to assess the quantitative evidence on the importance of these factors suggests that they account for a small to moderate portion of the gender pay gap, considerably smaller than say occupation and industry effects, though they appear to modestly contribute to these differences."

One conclusion in terms of future work is to understand better what psychological factors matter, and how much they do matter. While there has been some work on that line, it is really very far from giving a great answer, I believe.

I count my own work in that vein, as a step in the right direction: showing the importance of psychological factors, though hard to assess their impact on the gender wage gap, see Thomas Buser and Hessel Oosterbeek Gender, Competitiveness and Career Choices,” receives a very nice summary (see also my former blogposts on it here and here)

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