Abstract:
This paper provides estimates for male-female earnings differentials in Sweden and Finland, incorporating the use of the Heckman (1979) two-step procedure for sample selection bias. Women who take part in the labor market may be a non-random sub-set of those being able to work. Therefore, the use of the Heckman two-step procedure for sample selection bias is essential. This technique enables the decision of females to participate in the labor market to be modeled and their earnings corrected for self-selection. The gender gap is subsequently calculated using Reimers (1983) method.