Mandatory Earnings-Related Insurance Rights, Human Capital and the Gender Earnings Gap in Sweden

Lena Granqvist, Jan Selén and Ann-Charlotte Ståhlberg ()
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Lena Granqvist: SOFI, Postal: Stockholm University, SE-106 91 Stockholm, Sweden
Jan Selén: Trade Union Institute for Economic Research, Postal: FIEF, Wallingatan 38, SE-111 24 Stockholm, Sweden
Ann-Charlotte Ståhlberg: SOFI, Postal: Stockholm University, SE-106 91 Stockholm, Sweden

No 179, Working Paper Series from Trade Union Institute for Economic Research

Abstract: Most labour market analyses take money wages as the sole measure of compensation for labour, thus excluding fringe benefits. We examine an extended compensation measure by incorporating mandatory collective earnings-related insurance rights: the rights of individual old age pension, sickness benefit insurance and survivors’ pension. We estimate the return on investment in human capital and the gender earnings gap in a traditional earnings equation. The money wage and the extended wage are used as dependent variables in joint regressions, where a SUR framework enables proper joint cross-equation tests. The main finding is that the inclusion of earnings-related insurance rights does affect the return on education. When these non-wage benefits are included, the gender wage gap decreases by 21 per cent. However, the gender differences in returns to education are severely underestimated when money wage is used as a compensation measure.

Keywords: Non-wage benefits; Gender gap; Human capital; Occupational welfare (search for similar items in EconPapers)
JEL-codes: H55 J16 J26 J32 J33 M52 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2002-10-07
New Economics Papers: this item is included in nep-ias and nep-lab
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:fiefwp:0179

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