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Title: Pay Gaps and Industrial Composition
Citation Type: Miscellaneous
Publication Year: 2016
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Abstract: Are differences in the quality of outside prospects, particularly those stemming from an economy's industrial structure, influential in generating differences in pay between workers? We focus on the gender pay gap in the U.S. during the 1980-2000 period. We develop a formal search and matching model that connects outside prospects, industrial structure and wage gaps and use it to guide our subsequent empirical work. Our results suggest that an economy's adjusted gender pay gap which controls for industry in addition to human capital characteristics is substantially influenced by gender differences in the quality of outside prospects generated by the economy's industrial structure. The effect of industrial structure via this channel is estimated to be at least as large as the mechanical (composition) effect. The mechanism can account for 25-35% of the adjusted gender gap, and around 10-15% of the variation in this gap across cities. Our estimates also suggest that the relatively sharp narrowing of the adjusted gender pay gap during the 1980s is fully accounted for by the relatively sharp decline in the outside prospects of males during this period.
Url: http://www.sfu.ca/~cbidner/files/Bidner_Sand_WageGaps.pdf
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Authors: Bidner, Chris; Sand, Ben
Publisher: Simon Fraser University
Data Collections: IPUMS USA
Topics: Gender, Labor Force and Occupational Structure
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