Swimming Upstream, Floating Downstream: Trends in the U.S. And Danish Gender Wage Gaps

CLS Working Paper No. 01-06

51 Pages Posted: 22 Nov 2001

See all articles by Nabanita Datta Gupta

Nabanita Datta Gupta

Department of Economics and Business, Aarhus University; IZA Institute of Labor Economics

Ronald L. Oaxaca

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

Nina Smith

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

Date Written: May 2001

Abstract

While the gender wage gap has reduced considerably in the U.S. since the late 1970s, in Denmark it has virtually stagnated over the same period. Using the U.S. CPS and the Danish Longitudinal Sample data, we compare the development in the gender wage gaps in these two countries between 1983-1995 in both time-series and microeconometric analyses. We present a new decomposition methodology that is anchored on the overall wage distribution and show that the difference in the rates of convergence of the wage gaps in the two countries in this period can be explained by inter-country differences in the wage effects of observed skill prices and gender differences in selectivity. In Denmark, these effects have wiped out any gains arising from women's skill improvement. In the U.S., these effects have not offset women's wage gains due to skill-improvement. Decompositions at different deciles of the distribution show that women at the highest decile in Denmark have the biggest increase in the wage gap in this period, primarily due to unobservables. In the U.S., the decline in the wage gap is largest at the top and at the middle of the distribution.

Keywords: gender wage gaps, decomposition method

JEL Classification: J7

Suggested Citation

Datta Gupta, Nabanita and Oaxaca, Ronald L. and Smith, Nina, Swimming Upstream, Floating Downstream: Trends in the U.S. And Danish Gender Wage Gaps (May 2001). CLS Working Paper No. 01-06. Available at SSRN: https://ssrn.com/abstract=291400 or http://dx.doi.org/10.2139/ssrn.291400

Nabanita Datta Gupta (Contact Author)

Department of Economics and Business, Aarhus University ( email )

Fuglesangs Allé 4
8210 Aarhus V
Denmark
+45 87165207 (Phone)

HOME PAGE: http://pure.au.dk/portal/da/ndg@econ.au.dk

IZA Institute of Labor Economics

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

Ronald L. Oaxaca

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

Nina Smith

Aarhus University - Department of Economics ( email )

Universitetsparken
DK-8000 Aarhus C
Denmark
+45 8948 6413 (Phone)
+45 8615 5175 (Fax)

IZA Institute of Labor Economics

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

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