Inter-Industry Wage Differentials and the Gender Wage Gap: An Identification Problem

Industrial and Labor Relations Review, April 2001

Posted: 18 Jul 2001

See all articles by William C. Horrace

William C. Horrace

Syracuse University - Department of Economics

Ronald L. Oaxaca

University of Arizona - Department of Economics; IZA Institute of Labor Economics

Abstract

An intuitively appealing method for estimating gender wage gaps by industry is shown to yield estimates that vary according to the arbitrary choice of left-out reference groups for non-industry categorical variables, such as race and marital status. This study uses data from the Current Population Surveys to explore alternative methods for estimating gender wage gaps by industry that are not susceptible to the identification problem. Statistical significance measures reveal when relative industry wage gap rankings are not statistically meaningful. The methodology readily extends to other contexts such as racial, union-nonunion, or immigrant-native wage gaps by industry, occupational, or regional groupings.

Suggested Citation

Horrace, William C. and Oaxaca, Ronald L., Inter-Industry Wage Differentials and the Gender Wage Gap: An Identification Problem. Industrial and Labor Relations Review, April 2001. Available at SSRN: https://ssrn.com/abstract=258862

William C. Horrace

Syracuse University - Department of Economics ( email )

Syracuse, NY 13244-1020
United States
315-443-9061 (Phone)
315-443-1081 (Fax)

HOME PAGE: http://faculty.maxwell.syr.edu/whorrace

Ronald L. Oaxaca (Contact Author)

University of Arizona - Department of Economics ( email )

McClelland Hall
Tucson, AZ 85721-0108
United States
520-621-4135 (Phone)
520-621-8450 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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