Urban Wage Premium for Women Across the Wage Distribution
52 Pages Posted: 28 Aug 2020
Date Written: July 21, 2020
The urban wage premium (UWP) is a positive wage differential of individuals working in dense areas. Few studies identify and compare the UWP between genders or analyze the female UWP. It is precisely because there is different behavior between genders that the inclusion of women becomes relevant. The female UWP investigation seeks to understand whether:
(i) agglomeration economies in denser areas benefit men and women differently;
(ii) the skill level of the occupation in the labor market influences the magnitude of the UWP between genders;
(iii) the female and male UWP change across the wage distribution.
Thus, this paper aims to evaluate the UWP for women in Brazil from 2012 to 2019 using the Continuous National Household Sample Survey (PNADC/IBGE). These data allow the analysis of several characteristics of individuals, occupations, firms, and households, with national coverage and representativeness. The paper’s main result shows that female UWP is almost double the male one, reaching 11.3% versus 5.7%. We also find a higher UWP for women in subgroups based on the formality status in the labor market and the agglomeration levels. Quantile regressions reveal different magnitude for the UWP throughout the wage distribution and different trajectories between men and women. High-skill occupations provide higher premiums in denser areas meaning that the labor market occupation also matters for the female UWP magnitude. The main conclusion is that the UWP may be underestimated in most studies that consider only men. Besides, the UWP can be overestimated not examining the wage distribution. Therefore, this paper contributes to the UWP literature, by including women and highlighting differences between genders beyond participation and wage level.
Keywords: female labor market, urban wage premium, agglomeration levels, gender gap
JEL Classification: R23, J16, J21, J31
Suggested Citation: Suggested Citation