Distributional and Behavioral Effects of the Gender Wage Gap

Patricia Gallego-Granados and Johannes Geyer

No 753, SOEPpapers on Multidisciplinary Panel Data Research from DIW Berlin, The German Socio-Economic Panel (SOEP)

Abstract: The gender wage gap is a persistent labor market phenomenon. Most research focuses on the determinants of these wage differences. We contribute to this literature by exploring a different research question: if wages of women are systematically lower than male wages, what are the distributional consequences (disposable income) and what are the labor market effects (labor supply) of the wage gap? We demonstrate how the gender gap in gross hourly wages shows up in the distribution of disposable income of households. This requires taking into account the distribution of working hours as well as the tax-benefit system and other sources of household income. We present a methodological framework for deriving the gender wage gap in terms of disposable income which combines quantile decomposition, simulation techniques and structural labor supply estimation. This allows us to examine the implications of the gender wage gap for income inequality and working incentives. We illustrate our approach with an application to German data.

Keywords: Gender wage gap; quantile regression; wage decomposition; labor supply; microsimulation; income distribution; tax-benefit system (search for similar items in EconPapers)
JEL-codes: D31 H23 J16 J31 (search for similar items in EconPapers)
Pages: 42 p.
Date: 2015
New Economics Papers: this item is included in nep-dem, nep-lab and nep-ltv
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Distributional and Behavioral Effects of the Gender Wage Gap (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:diw:diwsop:diw_sp753

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