Selection on Ability and the Early Career Growth in the Gender Wage Gap

50 Pages Posted: 5 Jun 2017

See all articles by Eduardo Fraga

Eduardo Fraga

Yale University - Department of Economics

Gustavo Gonzaga

Pontifical Catholic University of Rio de Janeiro (PUC-Rio)

Rodrigo R. Soares

Columbia University - School of International & Public Affairs (SIPA); Getulio Vargas Foundation (FGV) - Sao Paulo School of Economics; IZA Institute of Labor Economics

Abstract

This paper analyzes the effect of selection on ability on the evolution of the gender wage gap during the first years of professional life. We use longitudinal data with 16 years of the early career history of formal sector workers in Brazil. The panel allows us to build a measure of unobserved ability that we use to analyze the dynamics of labor market selection across genders as individuals age. We focus on the cohort born in 1974, for which we have a close to complete history of formal labor market participation. For this cohort, the average ability of formally employed men improved in relation to that of women during the first years of professional life. The selection of men and women into the labor market was similar at age 21, but by age 31 high‐ability men (one standard deviation above the mean) had a probability of employment 1.6 percentage point higher than their high‐ability female counter-parts. This contributed to the increase in the conditional gender wage gap observed in the early career, as the ability distribution of employed women deteriorated in relation to that of employed men. Our estimates suggest that, for the 1974 cohort, this mechanism explains 32% of the cumulative growth in the conditional gender wage gap between ages 21 and 36.

Keywords: gender wage gap, selection, ability, lifecycle

JEL Classification: J16, J21, J31, J71

Suggested Citation

Fraga, Eduardo and Gonzaga, Gustavo and Soares, Rodrigo R., Selection on Ability and the Early Career Growth in the Gender Wage Gap. IZA Discussion Paper No. 10791, Available at SSRN: https://ssrn.com/abstract=2979939

Eduardo Fraga (Contact Author)

Yale University - Department of Economics

28 Hillhouse Ave
New Haven, CT 06520-8268
United States

Gustavo Gonzaga

Pontifical Catholic University of Rio de Janeiro (PUC-Rio) ( email )

Brazil

Rodrigo R. Soares

Columbia University - School of International & Public Affairs (SIPA) ( email )

420 West 118th Street
New York, NY 10027
United States

Getulio Vargas Foundation (FGV) - Sao Paulo School of Economics ( email )

Rua Itapeva 474 s.1202
São Paulo, São Paulo 01332-000
Brazil

IZA Institute of Labor Economics

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

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
66
Abstract Views
517
rank
392,356
PlumX Metrics