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Gender wage gap and education: a stochastic frontier approach

Gender wage gap and education: a stochastic frontier approach PurposeThe purpose of this paper is to get deeper insight into the measurement of gender wage gap. A proper method to identify which part of gender wage differences is due to discrimination against women is provided, and the relationship between wage differences and education is studied.Design/methodology/approachThe stochastic frontier approach is employed to measure wage discrimination against women by using Spanish data from the European Union Statistics on Income and Living Conditions. Mentioned technique allows the authors to split the gender wage gap of workers displaying the same characteristics into two components: the first measures inefficiency in the job search process caused by imperfect information or gender differences concerning preferences regarding working conditions, where as the second takes account of discrimination.FindingsA significant level of discrimination is found in the Spanish labour market at all educational levels, but this problem is quantitatively more important when low-educated workers are studied, and gender discrimination is lower for highly educated women.Originality/valueIn this paper, workers’ potential wage is estimated, and gender discrimination is measured by the gender potential wage gap, since it is not dependent on other wage determinants such as diverse preferences, unmeasured working abilities or imperfect information. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Manpower Emerald Publishing

Gender wage gap and education: a stochastic frontier approach

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
0143-7720
DOI
10.1108/IJM-11-2015-0186
Publisher site
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Abstract

PurposeThe purpose of this paper is to get deeper insight into the measurement of gender wage gap. A proper method to identify which part of gender wage differences is due to discrimination against women is provided, and the relationship between wage differences and education is studied.Design/methodology/approachThe stochastic frontier approach is employed to measure wage discrimination against women by using Spanish data from the European Union Statistics on Income and Living Conditions. Mentioned technique allows the authors to split the gender wage gap of workers displaying the same characteristics into two components: the first measures inefficiency in the job search process caused by imperfect information or gender differences concerning preferences regarding working conditions, where as the second takes account of discrimination.FindingsA significant level of discrimination is found in the Spanish labour market at all educational levels, but this problem is quantitatively more important when low-educated workers are studied, and gender discrimination is lower for highly educated women.Originality/valueIn this paper, workers’ potential wage is estimated, and gender discrimination is measured by the gender potential wage gap, since it is not dependent on other wage determinants such as diverse preferences, unmeasured working abilities or imperfect information.

Journal

International Journal of Manpower – Emerald Publishing

Published: Jun 5, 2017

References

  • Formulation and estimation of stochastic frontier production function models
  • Is there a glass ceiling in Sweden?
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  • Ceilings or floors? Gender wage gaps by education in Spain
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  • Using stochastic frontiers to measure gender wage discrimination: the Spanish case
  • Actual and potential returns to schooling in Spain
  • Underpaid and overworked: measuring the effect of imperfect information on wages
  • A new approach form measuring wage ignorance in the labor market