Why Do Women's Wages Increase So Slowly Throughout Their Career? A Dynamic Model of Statistical Discrimination
GATE Working Paper No. 07-22
34 Pages Posted: 25 Oct 2007 Last revised: 11 May 2010
Date Written: October 1, 2007
The aim of this paper is to explain the growing wage differentials between men and women during their working careers. We provide a dynamic model of statistical discrimination, which integrates specific human capital decisions: on-the-job training investment and wages are endogenously determined. We reveal a small wage differential at the beginning of women's career, followed by a larger wage differential; this is partly due to a lower level of human capital investment by women and partly because firms smooth training costs between different periods.
Keywords: gender gaps, gender wage gap, specific human capital, statistical discrimination
JEL Classification: J16, J24, J31, J62, J71
Suggested Citation: Suggested Citation
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