Decomposing the Gender Wage Gap in the Netherlands with Sample Selection Adjustments

53 Pages Posted: 16 Nov 2004

See all articles by James Albrecht

James Albrecht

Georgetown University - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

Aico van Vuuren

Erasmus University Rotterdam (EUR) - Department of Economics

Susan Vroman

Georgetown University; IZA Institute of Labor Economics

Date Written: November 2004

Abstract

In this paper, we use quantile regression decomposition methods to analyze the gender gap between men and women who work full time in the Netherlands. Because the fraction of women working full time in the Netherlands is quite low, sample selection is a serious issue. In addition to shedding light on the sources of the gender gap in the Netherlands, we make two methodological contributions. First, we prove that the Machado-Mata quantile regression decomposition procedure yields consistent and asymptotically normal estimates of the quantiles of the counterfactual distribution that it is designed to simulate. Second, we show how the technique can be extended to account for selection.

We find that there is a positive selection of women into full-time work in the Netherlands; i.e., women who get the greatest return to working full time do work full time. We find that about two thirds of this selection is due to observables such as education and experience with the remainder due to unobservables. Our decompositions show that the majority of the gender log wage gap is due to differences between men and women in returns to labor market characteristics rather than to differences in the characteristics. This is true across the wage distribution, particularly in the top half of the distribution.

Keywords: gender, quantile regression, selection

JEL Classification: C24, J22, J31, J71

Suggested Citation

Albrecht, James W. and van Vuuren, Aico and Vroman, Susan B., Decomposing the Gender Wage Gap in the Netherlands with Sample Selection Adjustments (November 2004). IZA Discussion Paper No. 1400. Available at SSRN: https://ssrn.com/abstract=621064

James W. Albrecht (Contact Author)

Georgetown University - Department of Economics ( email )

Washington, DC 20057
United States
202-687-6105 (Phone)
202-687-6102 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

IZA Institute of Labor Economics

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

Aico Van Vuuren

Erasmus University Rotterdam (EUR) - Department of Economics ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands
+31 10 4082158 (Phone)
+31 10 4089149 (Fax)

Susan B. Vroman

Georgetown University ( email )

Washington, DC 20057
United States
202-687-6024 (Phone)
202-687-6102 (Fax)

IZA Institute of Labor Economics

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

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