Explaining the Gender Wage Gap: Estimates from a Dynamic Model of Job Changes and Hours Changes

47 Pages Posted: 25 Aug 2012

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Kai Liu

Norwegian School of Economics (NHH)

Multiple version iconThere are 2 versions of this paper

Date Written: June 2012

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 constraints. 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.

JEL Classification: J31, J16, J63

Suggested Citation

Liu, Kai, Explaining the Gender Wage Gap: Estimates from a Dynamic Model of Job Changes and Hours Changes (June 2012). NHH Dept. of Economics Discussion Paper No. 15/2012. Available at SSRN: https://ssrn.com/abstract=2135533 or http://dx.doi.org/10.2139/ssrn.2135533

Kai Liu (Contact Author)

Norwegian School of Economics (NHH) ( email )

Helleveien 30
Bergen
Norway

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