The Dynamics of Gender Earnings Differentials: Evidence from Establishment Data

39 Pages Posted: 31 Aug 2017

See all articles by Erling Barth

Erling Barth

Institute for Social Research, Norway; Department of Economics, University of Oslo; IZA Institute of Labor Economics

Sari Pekkala Kerr

Charles River Associates (CRA)

Claudia Olivetti

Boston College; National Bureau of Economic Research (NBER)

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Abstract

We use a unique match between the 2000 Decennial Census of the United States and the Longitudinal Employer Household Dynamics (LEHD) data to analyze how much of the increase in the gender earnings gap over the lifecycle comes from shifts in the sorting of men and women across high- and low-pay establishments and how much is due to differential earnings growth within establishments. We find that for the college educated the increase is substantial and, for the most part, due to differential earnings growth within establishment by gender. The between component is also important. Differential mobility between establishments by gender can explain 27 percent of the widening of the pay gap for this group. For those with no college the relatively small increase of the gender gap over the lifecycle can be fully explained by differential moves by gender across establishments. The evidence suggests that, for both education groups, the between-establishment component of the increasing wage gap is due almost entirely to those who are married.

Keywords: gender pay gap, establishment wage differentials, earnings growth

JEL Classification: J16, J31

Suggested Citation

Barth, Erling and Pekkala Kerr, Sari and Olivetti, Claudia, The Dynamics of Gender Earnings Differentials: Evidence from Establishment Data. IZA Discussion Paper No. 10974. Available at SSRN: https://ssrn.com/abstract=3029846

Erling Barth (Contact Author)

Institute for Social Research, Norway ( email )

Munthesgate 31
0260 Oslo
Norway

Department of Economics, University of Oslo ( email )

PO Box 6706 St Olavs plass
Oslo, N-0317
Norway

IZA Institute of Labor Economics

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

Sari Pekkala Kerr

Charles River Associates (CRA) ( email )

1201 F. St. NW
Ste. 700
Washington, DC 20004
United States

Claudia Olivetti

Boston College ( email )

140 Commonwealth Avenue
Chestnut Hill, MA 02467
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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