Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/207486 
Authors: 
Year of Publication: 
2019
Series/Report no.: 
IZA Discussion Papers No. 12661
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
This paper investigates to what extent changes in the returns to occupational skill and declining occupational segregation have reduced wage inequality between men and women. As a first pass, I find that roughly 65% of the decline in the gender wage gap between 1985 and 2010 can be explained by a reduction in occupational segregation between the genders. The remaining 35% are explained by shifts in occupational wages which increased within occupations important for female employment, and declined in many occupations important for male employment such as producing occupations. Motivated by the central of Böhm et al. (2019) that average wages do not move as much as skill prices, I reestimate the part of the declining wage gap attributed to changes in (selection corrected) skill prices. The impact of movements in skill prices on the reduction in gender wage inequality was roughly 13 percentage points larger than the impact of changes in average wages alone. Similar findings hold when decomposing the rise in the proportion of women at higher percentiles of the wage distribution and vice versa for lower percentiles. This underscores the importance of accounting for selection effects in decompositions.
Subjects: 
gender wage gap
inequality
Roy model
returns to skill
occupational choice
JEL: 
J16
J31
J24
Document Type: 
Working Paper

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