Scandinavian Working Papers in Economics

Discussion Paper Series in Economics,
Norwegian School of Economics, Department of Economics

No 15/2012: Explaining the Gender Wage Gap: Estimates from a Dynamic Model of Job Changes and Hours Changes.

Kai Liu ()
Additional contact information
Kai Liu: Dept. of Economics, Norwegian School of Economics and Business Administration, Postal: NHH , Department of Economics, Helleveien 30, N-5045 Bergen, Norway

Abstract: I address the causes of the gender wage gap with a new dynamic model of wage, hours, and job changes that permits me to decompose the gap into a portion due to gender differences in preferences for part-time work and in onstraints. The dynamic model allows the differences in constraints to reflect possible gender differences in job arrival rates, job destruction rates, the mean and variance of the wage offer distribution, and the full-time/part-time wage premium. I find that the differences in preferences explain no more than 5% of the gender gap in hourly wages and 7-20% of the gender gap in weekly wages. The differences in constraints, mainly in the form of differences in the mean offered wages, explain the remaining gender wage gap. Most of the gender differences in employment, hours of work and job turnover can be attributed to the differences in preferences.

Keywords: Gender differences; employment

JEL-codes: J16; J31; J63

41 pages, June 22, 2012

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